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Oracle Stock Down 14%. Why Higher Risk Makes $ORCL A Sell
Oracle's $12 billion AI capital spending, over 40% above forecasts, triggered a nearly 12% stock drop, raising investor concerns about cash flow and AI spending sustainability.
- On Thursday, Oracle, software and cloud computing giant, shares plunged nearly 12% after revenue missed expectations, dragging the U.S. markets, with the S&P 500 falling 0.4%.
- Oracle reported capital spending that ran more than 40% above expectations, sparking investor concern about cash flow due to debt-financed AI investments, analysts say.
- Nasdaq futures fell 0.4% and S&P 500 futures dropped 0.2% as AI stocks declined amid Oracle's cash flow concerns, while the Dow Jones Industrial Average rose 0.4% and Oxford Industries tumbled more than 22% after lowering its outlook.
- Investors took heart from Federal Reserve Chair Jerome Powell's Wednesday remarks, perceived as more open to rate cuts, and Treasury yields fell after a weekly jobless claims report showed a larger-than-expected rise.
- In Tokyo, the Nikkei 225 index fell 0.9% to 50,148.82 after SoftBank Group Corp. slid 7.7%, while Hong Kong's Hang Seng shed less than 0.1% to 25,530.51 after the Hong Kong Monetary Authority cut borrowing costs to 4.00%.
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Oracle Stock Just Tumbled: Here's One Reason Why
Key PointsOracle stock tumbled after its second-quarter report.Heavy spending on AI infrastructure has been slow to boost revenue, and profitability is a question mark.Investors appear to be skeptical of the AI growth narrative.10 stocks we like better than Oracle › Oracle (NYSE: ORCL), once a software company with minimal capital spending needs, has been transformed by the AI boom. The company's strategy is to build AI infrastructure and rent i…
·Alexandria, United States
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Total News Sources53
Leaning Left12Leaning Right3Center22Last UpdatedBias Distribution60% Center
Bias Distribution
- 60% of the sources are Center
60% Center
L 32%
C 60%
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