Oracle AI Reality Check Knocks Stocks Lower as Fed Rate Cut Weakens Dollar
Oracle's $15B AI overspend warning triggers tech selloff across global markets.
Insights:
Global stock markets stalled on Thursday as cloud computing giant Oracle(SY:ORCL) delivered a sobering warning about AI profitability, while bonds firmed and the dollar weakened following the U.S.
US Federal Reserve's third consecutive interest rate cut. The tech sector faced renewed pressure as Oracle reignited concerns over sky-high valuations by missing analyst estimates for both sales and profits while flagging a staggering $15 billion AI overspend.
US Federal Reserve's third consecutive interest rate cut. The tech sector faced renewed pressure as Oracle reignited concerns over sky-high valuations by missing analyst estimates for both sales and profits while flagging a staggering $15 billion AI overspend.Oracle's shares plunged over 11% in after-hours U.S. trading, dragging Nasdaq futures and Japan's
JP Nikkei down approximately 1%. The selloff extended to Oracle's partners, with SoftBank(SY:9984.T)—a collaborator on the U.S. Stargate data centre project—tumbling more than 7.5%. The contagion spread to European markets, where Germany's
DE dropped 2.5%, pushing the region's tech indices into their third consecutive day of losses.
JP Nikkei down approximately 1%. The selloff extended to Oracle's partners, with SoftBank(SY:9984.T)—a collaborator on the U.S. Stargate data centre project—tumbling more than 7.5%. The contagion spread to European markets, where Germany'sDE dropped 2.5%, pushing the region's tech indices into their third consecutive day of losses.
