Investors are seeking more AI profit and fewer promises |
Oracle’s most recent earnings report disappointed investors, sending share prices downward.Richard Vogel/The Associated Press
Last week the AI bubble, which seemed like it was going to inflate forever, may have sprung its first leak.
It happened when Oracle Corporation ORCL-N, one of the companies in the vanguard of the artificial intelligence revolution, reported its earnings.
The company – co-founded by Larry Ellison, a close ally of Donald Trump – had been one of the darlings of the boom. Between the day Mr. Trump was sworn in as president in January and late September, its share price almost doubled in value.
Then things went south. Investors started growing antsy in the autumn when Oracle tied up a big expansion deal with OpenAI, the creator of ChatGPT. They didn’t like that it relied on a heavy dose of borrowing. Things got worse last week when Oracle’s earnings, though hardly awful, disappointed. The kind of revenues the AI boom was meant to deliver weren’t yet turning up in the company’s bottom line.
Oracle shares tumble as gloomy forecasts, higher capex reignite AI bubble concerns
Give us more time, the company was effectively saying. Investors said no. The consequent plunge in Oracle’s share price has now wiped out........