Oracle’s stock experienced a sharp decline following its latest financial report, highlighting a significant increase in investment plans aimed at expanding data center infrastructure for artificial intelligence (AI). Despite a quarterly revenue growth of 14%, reaching $16.1 billion, the results fell short of analyst expectations, prompting investor concern.

On Thursday, Oracle’s shares dropped 11 percent in pre-market trading, reflecting market apprehension about the company’s growth trajectory. The company announced a substantial rise in capital expenditure, raising its annual forecast by over 40 percent to $50 billion. Notably, investments in data centers surged to $12 billion in the quarter, surpassing the projected $8.4 billion, underscoring Oracle’s strategic shift toward AI infrastructure.

Experts note that such aggressive investment indicates Oracle’s focus on capturing the rapidly expanding AI market, which requires vast data processing capabilities. According to industry analysts, this move might strain short-term profitability but positions Oracle for long-term leadership in AI cloud services.

David Nield

Dave is a freelance tech journalist with over 20 years covering gadgets, apps, and the web. From Stockport, England, he covers news, features, and reviews for TechRadar, focusing on phones, tablets, and wearables. He ensures top weekend breaking news and has bylines at Gizmodo, T3, PopSci, and others. He edited PC Explorer and The Hardware Handbook for years. Read me on x.com or linkedin.