Shares of cloud computing giant Oracle plunged more than 10% in after-hours trading on Wednesday after the company's revenues fell short of Wall Street expectations. The company reported revenue of $16.06bn (£11.99bn) for the three months that ended in November, compared with the $16.21bn projected by analysts.
Revenue growth was up 14%, with a 68% surge in sales at its AI business, Oracle Cloud Infrastructure (OCI), the company said. OCI services major AI technology developers whose demand for Oracle's AI infrastructure helped the company's shares reach new highs this fall, but Wednesday's results failed to quell fears about a potential AI bubble.
In September, Oracle inked a highly sought-after contract with ChatGPT-maker OpenAI, which agreed to purchase $300bn in computing power from Oracle over five years. Oracle chairman and chief technology officer Larry Ellison briefly became the world's richest man in September.
Oracle stock has lost 40% of its value since peaking three months ago. Still, shares are up more than a third since the start of the year. In a statement issued on Wednesday, Mr. Ellison struck a cautious tone, emphasizing that there are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.
Mr. Ellison also indicated that Oracle would remain flexible in its hardware strategy, aiming for chip neutrality amidst rising scrutiny over the company's debt as it expands its operations. Analysts highlight that this revenue miss may increase investor caution regarding Oracle's ambitious AI investments and partnerships.
Revenue growth was up 14%, with a 68% surge in sales at its AI business, Oracle Cloud Infrastructure (OCI), the company said. OCI services major AI technology developers whose demand for Oracle's AI infrastructure helped the company's shares reach new highs this fall, but Wednesday's results failed to quell fears about a potential AI bubble.
In September, Oracle inked a highly sought-after contract with ChatGPT-maker OpenAI, which agreed to purchase $300bn in computing power from Oracle over five years. Oracle chairman and chief technology officer Larry Ellison briefly became the world's richest man in September.
Oracle stock has lost 40% of its value since peaking three months ago. Still, shares are up more than a third since the start of the year. In a statement issued on Wednesday, Mr. Ellison struck a cautious tone, emphasizing that there are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes.
Mr. Ellison also indicated that Oracle would remain flexible in its hardware strategy, aiming for chip neutrality amidst rising scrutiny over the company's debt as it expands its operations. Analysts highlight that this revenue miss may increase investor caution regarding Oracle's ambitious AI investments and partnerships.
