LIVE MARKETS-Oracle shares head for worst quarter since 2001 as AI spending spooks investors

Reuters2025-12-29
LIVE MARKETS-Oracle shares head for worst quarter since 2001 as AI spending spooks investors

Updates with post on Oracle shares

US equity index futures red; Nasdaq 100 down ~0.7%

Euro STOXX 600 index up ~0.1%

Dollar ~flat; crude jumps >2%; bitcoin slips; gold slides >3%

US 10-Year Treasury yield edges down to ~4.12%

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ORACLE SHARES HEAD FOR WORST QUARTER SINCE 2001 AS AI SPENDING SPOOKS INVESTORS

Oracle ORCL.N is facing its steepest quarterly slide since 2001, with shares down about 30% as investors recoil at the mounting cost of its artificial intelligence push.

The sell-off recalls the dot-com crash, when Oracle shares tumbled nearly 34% during the third quarter of 2001.

The company guided adjusted earnings below the Wall Street consensus, and revenue growth trailing expectations, according to LSEG. Cloud sales also undershot estimates.

Oracle has been among the worst-performing Big Tech stocks this quarter, with just three trading sessions left on the calendar.

Jitters intensified after Oracle lifted its fiscal 2026 capital spending plan by $15 billion to roughly $50 billion, underscoring the sheer scale of its data-center buildout.

One of the market's most prolific bond issuers, Oracle carries about $105 billion in outstanding debt from bonds and other facilities, along with sizable lease obligations - leaving little margin for error if new capacity is slow to generate cash.

The sprawling expansion, central to Oracle's AI ambitions, has sharpened concerns about leverage, execution risk and overreach, even as demand for AI infrastructure soars.

Analysts warn that construction delays and higher financing costs could derail Oracle's aggressive timetable.

Oracle touts a formidable $523 billion backlog and partnerships with Nvidia NVDA.O, AMD AMD.O and the $500 billion Stargate project to show demand is real, but data-center delays, higher debt costs and heavy dependence on a few big customers are keeping investors on edge.

(Kritika Lamba)

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Oracle's shares fall about 30% this quarter https://reut.rs/4qssW3h

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