By Eva Roytburg
Publication Date: 2025-12-13 10:03:00
Oracle’s rapid descent from market darling to market warning sign reveals something deeper about the AI boom, experts say: Whatever how euphoric Investors have learned over the past two years that the industry cannot escape the laws of physics – or the realities of debt financing.
Shares of Oracle have slumped 45% from their September highs and are down 14% this week after a turmoil Results report said it made quarterly capital expenditures of $12 billion, higher than the $8.25 billion expected by analysts.
Profit guidance was also weak, and the company raised its forecast for capital spending in fiscal 2026 by another $15 billion. Most of that goes to data centers for OpenAI, Oracle’s $300 billion partner in the AI cycle.
“We have ambitious, achievable targets for global capacity deployment,” Oracle co-CEO Clay Magouyrk said on an earnings call this week.
Investors are worried about how Oracle will pay for these huge expenses as its underlying revenue streams, cloud revenue and…