Oracle shares slide as data centre spending mounts

Oracle’s Larry Ellison. Investors have been concerned about the large amounts the company will have to borrow and spend on infrastructure for OpenAI © Getty ImagesOracle shares slide as data centre spending mounts on x (opens in a new window)Oracle shares slide as data centre spending mounts on facebook (opens in a new window)Oracle shares slide as data centre spending mounts on linkedin (opens in a new window)Oracle shares slide as data centre spending mounts on whatsapp (opens in a new window) Save Oracle shares slide as data centre spending mounts on x (opens in a new window)Oracle shares slide as data centre spending mounts on facebook (opens in a new window)Oracle shares slide as data centre spending mounts on linkedin (opens in a new window)Oracle shares slide as data centre spending mounts on whatsapp (opens in a new window) Save Rafe Rosner-Uddin in San FranciscoPublishedDecember 10 2025UpdatedDecember 10 2025Jump to comments sectionPrint this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Oracle stock fell on Wednesday after it reported disappointing revenues alongside a sharp rise in capital expenditure driven by its huge push into data centres.Shares in Larry Ellison’s database group fell more than 10 per cent in after-hours trading after it reported revenues of $16.1bn, up 14 per cent from the previous year, but below analysts’ estimates of $16.2bn. Capital expenditure climbed to $12bn in the quarter, above expectations of $8.4bn. Oracle raised its forecast for capex this financial year by about $15bn to $50bn.Oracle said its total future contracts, known as remaining performance obligations, rose 15 per cent to $523bn in the three months to the end of November, supported by deals with Meta and Nvidia. Doug Kehring, principal financial officer, said this business “can be monetised quickly starting next year” and justified the extra investment.Oracle shares surged after its last quarterly earnings in September when it disclosed it had added more than $300bn in bookings largely driven by large contracts to supply computing power to OpenAI. But they have given up their gains since as investors worry about the large amounts the company will have to borrow and spend on infrastructure for OpenAI and concerns over the AI start-up’s ability to pay for these contracts in the years ahead.Rival cloud providers including Amazon, Google and Microsoft have helped reassure investors about their large capital investments by posting strong earnings from their vast cloud units.But in the last quarter, Oracle’s cloud infrastructure business, which covers its expansion of data centres, posted worse than expected revenues of $4.1bn.Net income rose to $6.1bn, boosted by a $2.7bn pre-tax gain from the sale of semiconductor company Ampere to SoftBank. Investors and analysts have raised concerns about the upfront spending required by Oracle to fulfil long-term contracts. Moody’s in September flagged the company’s reliance on a small number of big customers such as OpenAI. Morgan Stanley forecasts that Oracle’s net debt will soar to about $290bn by 2028. The company sold $18bn of bonds in September and is in talks to raise $38bn in debt financing through a number of US banks.Brent Thill, an analyst at Jefferies, said that Oracle’s traditional business software — which generated $5.9bn in the quarter — provided some buffer amid accelerated spending. “But the timing mismatch between upfront capex and delayed monetisation creates near-term pressure,” Thill said, ahead of Wednesday’s earnings.Reuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article US companies Add to myFT Technology sector Add to myFT Corporate earnings and results Add to myFT Artificial intelligence Add to myFT Oracle Corp Add to myFT CommentsOracle stock fell on Wednesday after it reported disappointing revenues alongside a sharp rise in capital expenditure driven by its huge push into data centres.Shares in Larry Ellison’s database group fell more than 10 per cent in after-hours trading after it reported revenues of $16.1bn, up 14 per cent from the previous year, but below analysts’ estimates of $16.2bn. Capital expenditure climbed to $12bn in the quarter, above expectations of $8.4bn. Oracle raised its forecast for capex this financial year by about $15bn to $50bn.Oracle said its total future contracts, known as remaining performance obligations, rose 15 per cent to $523bn in the three months to the end of November, supported by deals with Meta and Nvidia. Doug Kehring, principal financial officer, said this business “can be monetised quickly starting next year” and justified the extra investment.Oracle shares surged after its last quarterly earnings in September when it disclosed it had added more than $300bn in bookings largely driven by large contracts to supply computing power to OpenAI. But they have given up their gains since as investors worry about the large amounts the company will have to borrow and spend on infrastructure for OpenAI and concerns over the AI start-up’s ability to pay for these contracts in the years ahead.Rival cloud providers including Amazon, Google and Microsoft have helped reassure investors about their large capital investments by posting strong earnings from their vast cloud units.But in the last quarter, Oracle’s cloud infrastructure business, which covers its expansion of data centres, posted worse than expected revenues of $4.1bn.Net income rose to $6.1bn, boosted by a $2.7bn pre-tax gain from the sale of semiconductor company Ampere to SoftBank. Investors and analysts have raised concerns about the upfront spending required by Oracle to fulfil long-term contracts. Moody’s in September flagged the company’s reliance on a small number of big customers such as OpenAI. Morgan Stanley forecasts that Oracle’s net debt will soar to about $290bn by 2028. The company sold $18bn of bonds in September and is in talks to raise $38bn in debt financing through a number of US banks.Brent Thill, an analyst at Jefferies, said that Oracle’s traditional business software — which generated $5.9bn in the quarter — provided some buffer amid accelerated spending. “But the timing mismatch between upfront capex and delayed monetisation creates near-term pressure,” Thill said, ahead of Wednesday’s earnings.