Shares of Oracle opened nearly 12% lower in Frankfurt on Wednesday, mirroring sharp after-hours losses in the U.S., after the enterprise software giant issued a weaker-than-expected sales and profit forecast. The move dragged Oracle stock into the red as investors reacted to the company’s cautious outlook.
Oracle said its AI cloud computing push will require significantly more capital, projecting that company spending will rise by an additional $15 billion compared to earlier estimates. The unexpected jump highlights Oracle’s aggressive attempts to expand its cloud infrastructure and compete with major players in the fast-growing AI computing market, though profits are materializing more slowly than Wall Street analysts had projected.
Jefferies described the latest tech earnings results as “mixed,” noting that Oracle’s $523 billion backlog came in slightly ahead of expectations. However, the firm said concerns surrounding Oracle’s AI investment strategy and the debt required to support its cloud expansion remain unresolved. Despite this, Jefferies maintained its buy rating and emphasized Oracle’s commitment to preserving its investment-grade credit rating. Oracle’s ramped-up spending reflects a broader trend across the tech sector, where companies are pouring billions into GPU data centers, AI infrastructure, and next-generation cloud services to meet surging demand for machine learning workloads. While these investments aim to position Oracle as a major AI cloud provider, they continue to pressure short-term profitability.
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