Oracle Faces Market Turbulence Amid AI Investment Surge and Cloud Sales Miss

Oracle Corporation witnessed a sharp decline in its market value after reporting quarterly results that failed to meet investors’ expectations. The software and cloud services giant saw more than 70 billion dollars wiped from its market capitalisation as cloud sales fell short and the company outlined plans for a significant increase in capital expenditure to support artificial intelligence data centres.

Despite a 34 percent year on year increase in second quarter cloud sales to 7.98 billion dollars and a 68 percent rise in infrastructure revenue to 4.08 billion dollars, both figures came in below analysts’ estimates. Market commentators noted unease among technology investors, who have grown increasingly wary of the scale of investment required to underpin the current wave of enthusiasm for AI-driven services.

Oracle, founded in 1977 and based in Texas, indicated that capital expenditures are expected to reach 50 billion dollars in the year to the end of May 2026. This represents an upward revision of 15 billion dollars since the estimate provided in September. Brokerages responded by cutting their price targets, with shares closing down by 10.8 percent at 198.84 dollars in New York on Thursday night.

The company, traditionally operating in the shadow of younger competitors such as Amazon, Microsoft, and Google, enjoyed a surge in share price earlier in the year following quarterly results that demonstrated growing demand for its relatively economical cloud infrastructure offering. Oracle recently signed notable cloud computing contracts with leading technology firms.

Some analysts, including those at Bank of America, remained optimistic about the long-term outlook, noting that exceptionally fast investment cycles are currently required to meet unprecedented demand for AI infrastructure. They describe the current weakness as the price of positioning to serve emerging technology trends, rather than evidence of fundamental concern.