oracle The company’s stock plunged 11% in premarket trading Thursday, extending yesterday’s losses after the company reported disappointing financial results.
The cloud computing and database software maker reported lower-than-expected quarterly revenue on Wednesday despite surging demand for its artificial intelligence infrastructure. Sales came in at $16.06 billion, compared to analysts’ expectations of $16.21 billion, according to data compiled by LSEG.
This also dragged down other AI-related names. chip darling Nvidia Last seen in pre-market trading was a 1.5% decline in memory and storage companies. micron Tech giants down 1.4% microsoft Cloud companies down 0.9% coreweave 3% down; AMD It fell into negative territory at 1.3%.
Oracle has been making a lot of noise in the market since it raised $18 billion in a jumbo bond offering in September, making it one of the largest debt issuances in history for the tech industry. The name caught the attention of investors when the company signed a $300 billion deal with OpenAI that same month. Oracle is moving further into cloud infrastructure, competing with big tech companies like Amazon, Microsoft and Google for AI contracts.
Other tech companies have recently issued bonds, but investors around the world are questioning Oracle’s aggressive plans to build out its AI infrastructure and whether it needs so much debt to do so.
Oracle specifically secured billions of dollars in construction financing through a consortium of banks related to data centers in New Mexico and Wisconsin. Citi analyst Tyler Radke estimates that the company will raise about $20 billion to $30 billion in debt each year over the next three years.
Despite recent losses, the company’s stock is up 34% since the beginning of the year.
