Oracle’s AI investments spook investors despite another impressive earnings and revenue beat
Shares of Oracle Corp. fell 9% in late trading today even though it surpassed Wall Street’s expectations on earnings and revenue and raised its profit forecast for the next financial year.
The problem: The database and cloud infrastructure giant revealed plans to raise even more debt to fund its ongoing artificial intelligence data center buildout.
The company reported fourth-quarter earnings before certain costs such as stock compensation of $2.03 per share while its revenue increased 21% from a year earlier to $19.18 billion. Those numbers were better than expected, with Wall Street analysts looking for earnings of just $1.96 per share on sales of $19.10 billion. All told, that meant Oracle was able to boost its net income to $4.22 billion at the end of the quarter, up from $3.43 billion in the year-ago period.
For the full year, Oracle reported $23.7 billion in negative free cash flow, while depreciation almost doubled to $7.62 billion. Its capital expenditures came to $55.66 billion, up 162% from a year earlier, highlighting the scale of its AI buildout.
