Oracle’s stock dropped sharply on Wednesday, sliding more than 10% in after-hours trading after the company reported quarterly revenue that fell just short of market expectations. For the three months ending in November, Oracle brought in $16.1 billion, slightly below analysts’ forecast of $16.2 billion. Despite the miss, the company still saw a 14% increase in total revenue and a massive 68% jump in sales from its AI-focused division, Oracle Cloud Infrastructure (OCI).
Oracle’s AI services have been in high demand from major developers, helping boost the company’s share price throughout the year. However, the latest numbers did little to calm fears that the AI market may be overheating, potentially forming a bubble.
A major spotlight fell on Oracle earlier this year when it secured a highly competitive deal with OpenAI. Under this agreement, OpenAI will purchase $300 billion worth of computing power over five years, a huge win for Oracle that briefly pushed Larry Ellison to the top of the world’s richest list.
But the company’s stock has struggled since then. Oracle shares have now fallen 40% from their peak three months ago, although they remain up more than 30% since January. He also emphasized a new stance he called “chip neutrality,” saying the company will buy advanced AI chips from any manufacturer—not just Nvidia—to ensure it can meet customer demand.
Others argue that Oracle’s results are strong and that the negative market reaction is exaggerated. They point out that Oracle’s 14% revenue growth is accelerating, and the company has signed $385 billion in contracts over the past six months alone, including agreements with major clients such as Meta and Nvidia.
Still, sentiment across the AI sector is currently unstable. While this strengthens its AI ambitions, it has also added pressure from investors worried about rising liabilities.
Outside of tech, the Ellison family has been active in media acquisitions, recently purchasing Paramount and pursuing a takeover bid for Warner Bros Discovery, further expanding their influence in both technology and entertainment.
