Oracle Shares Plummet 13% to Four-Week Low Amid Investor Concerns Over AI-Driven Spending Plans

Oracle Shares Crash 13% to Four-Week Low Amid Concerns Over Capital Expenditure

Shares of Oracle Corp plummeted 13% on Thursday, 11 June, reaching a four-week low of $175.3 apiece on the New York Stock Exchange. The decline was triggered by the company's update on its capital expenditure plans, which exceeded Wall Street's estimates.

As a result, the stock is on track to register its biggest one-day drop since January last year, wiping out approximately $72 billion from the company's market capitalization of $578.83 billion. Oracle's fiscal fourth-quarter results revealed plans to spend billions of dollars on building large-scale data centers, sparking concerns among investors that the heavy investments could pressure profitability.

The company has been rapidly expanding its data center footprint, filled with high-end processors for customers such as Meta and OpenAI. However, Oracle lacks the massive cash flows enjoyed by larger technology giants, which have largely funded their artificial intelligence investments internally. As a result, the company has been burning cash and raising debt at a time when its traditional software business faces growing competition from the very AI tools it aims to support through its cloud infrastructure.