Oracle shares fall as bubble fears return, hitting wider tech stocks
Published on
11/12/2025 - 10:48 GMT+1
Global markets failed to retain the momentum sparked by an interest rate cut from the Federal Reserve on Wednesday after fears of an AI bubble resurfaced.
Disappointing results from cloud computing giant Oracle weighed on wider tech stocks, with Nasdaq 100 futures down around 1% just after 3am in New York. S&P 500 futures slipped 0.79%, while Dow Jones futures dropped 0.44%. Asian markets were broadly in the red, while Europe opened lower.
Around the same time, Oracle shares were down 11.83% in pre-market trading as investors grew increasingly sceptical about the company’s business outlook.
Oracle on Wednesday announced heavy capital expenditures while missing profit and revenue expectations, reigniting fears around an imminent AI bubble burst. As excitement around the technology has driven firms to sky-high valuations, analysts are concerned that a correction is due as business fundamentals fail to keep up.
Oracle brought in revenue of $16.06bn (€13.74bn) for the quarter to November, marking a 14% year-on-year increase but still coming in below the $16.21bn (€13.86bn) projected by analysts.
Net income came to $6.14bn (€5.25bn), a dramatic 95% increase, boosted by a $2.7bn (€2.3bn) pre-tax gain in the sale of Oracle’s Ampere chip company to SoftBank.
The company also said it expected full-year revenues to remain unchanged from its previous forecast of $67bn (€57.29bn).
Investors nonetheless kept their focus on the company’s debt, ramped up via high bond sales in recent months, and spending on long-term assets.
Capital expenditure for the 2026 financial year is now expected to be 40% higher than previously forecasted, totalling around $50bn (€42.75bn).
Another metric causing concern is revenue from Oracle’s cloud infrastructure business, which came in below expectations at $4.1bn (€3.5bn).
A large share of the firm's capital expenditure is earmarked for the construction of data centres to power AI for clients like OpenAI, although investors fear that the firm might be placing too much money on a narrow, high-stakes bet. That’s particularly relevant as OpenAI sees more competition from companies like Google.
Compared to rivals like Amazon and Microsoft, Oracle was late to shift its focus from business software to cloud computing, and analysts now warn the firm could lose out if it fails to diversify revenue streams.
The souring narrative around Oracle is reflective of the broader change in market sentiment around AI. In September, the firm’s shares soared after OpenAI said it had agreed to purchase $300bn (€256.53bn) in computing power from Oracle over five years. That briefly made Oracle chairman Larry Ellison the world’s richest man.
Since that high, the firm’s shares have lost 40% of their value as investors wake up to the risks of a market correction. Analysts have notably sounded the warning bell over circular financing, where money is invested in a loop between related parties.
Elsewhere in the tech world, Nvidia stocks were down 1.58% in pre-market trading, while CoreWeave saw a 3.27% drop.
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