Oracle's cloud profits fall short, sending stock down 7%
Oracle's stock dropped over 7% on Tuesday after a report revealed its cloud computing profits weren't as strong as expected.
Even though Oracle pulled in about $900 million from renting NVIDIA-powered servers last quarter, only around $125 million turned into gross profit.
NVIDIA's shares slipped a bit too.
Despite the dip, Oracle's cloud revenues are still on the rise
Oracle's cloud services and license revenues are still climbing, and the company is optimistic about future growth.
But high spending on NVIDIA chips and new data centers dragged its gross margin down to 67.3%—the lowest in more than a year.
Oracle is doubling down on its cloud and AI strategy
Oracle isn't slowing down: it just signed a deal to supply OpenAI with massive data center capacity (4.5 gigawatts!).
Plus, Oracle is reportedly part of a group close to buying TikTok's US operations, showing it wants to stay at the heart of cloud and AI action.