San Francisco (United States) (AFP) – Shares in business computing giant Oracle fell more than 10 percent on Wednesday on word its revenue missed heady expectations, dampening artificial intelligence euphoria in the market. The slide in after-market trades came despite Texas-based Oracle reporting that net income in the recently-ended quarter nearly doubled to $6.1 billion in revenue, up 14 percent from the same period a year earlier to $16.05 billion.
Oracle’s cloud and business computing unit accounted for $8 billion of that revenue, an increase of 34 percent from the same quarter in 2024, according to the earnings report. “AI training and selling AI models are very big businesses,” Oracle chief executive Mike Sicilia said in the release. “We think there is an even larger opportunity — embedding AI in a variety of different products.”
But investors are wary of the massive investments tech companies are making in artificial intelligence models and infrastructure, wondering how and when they will pay off. Oracle has taken on billions of dollars in debt to pay for AI infrastructure and is reported to be considering borrowing even more.
The company has also announced it is putting significant resources into partnerships with AI chip makers and model builders, such as OpenAI and Meta. “We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers,” Oracle founder and chief technology officer Larry Ellison said in the earnings release. “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.”
Oracle shares were down some 10.7 percent to $199.50 in after-market trades that followed the release of the earnings figures.
© 2024 AFP
