Oracle puts pressure on AI data centers as layoffs test growth story

Find winning stocks in every market cycle. Join 7 million investors and use Simply Wall St investing ideas for FREE.

• Oracle plans to cut thousands of jobs across multiple departments to manage costs associated with expanding its AI data center.

• The company is reportedly shifting its spending to large cloud infrastructure projects for customers such as OpenAI and Meta.

• Oracle and OpenAI have also decided to cancel a planned flagship AI data center project in Texas.

For investors watching NYSE:ORCL, these moves come with a share price of about $152.96, after rising 5.2% last week and 4.3% last month. Shares were roughly flat over the past year, down 0.4%, but up 88.6% over three years and 143.9% over five years, putting recent headlines against a backdrop of longer-term gains.

The combination of major investments in AI infrastructure, workforce cuts and a scrapped project in Texas shows how Oracle is recalibrating its approach…