Oracle's $100B stock drop: Big bets on AI make investors nervous
Oracle's shares took a major hit, losing over $100 billion in value after the company revealed it spent way more than expected—$12 billion—on AI data centers and other equipment last quarter.
Even though cloud revenue jumped 34% and infrastructure sales soared 68%, both missed Wall Street's hopes, fueling investor concerns about the pace at which Oracle's AI-related spending will generate returns.
Why does this matter?
It's a reminder that even huge companies aren't immune to risk.
Oracle is going all-in on AI, but funding that growth partly with debt has pushed its debt risk to the highest level in 16 years.
Investors are worried about whether these massive bets will deliver returns soon enough—and what it means for profits if growth slows down.
The bigger picture
Still, Oracle's total revenue grew 14% to $16.1 billion, and they scored a one-time boost from selling part of another company.
The takeaway? Ambitious moves can shake up even the biggest players—especially when expectations are sky-high.