🔗 Share this article Disappointing The Software Giant's Earnings Report Knock More Than $70bn From Worth, Stoking AI Bubble Anxiety. The tech firm's underwhelming latest earnings have slashed more than $70 billion from the value of the software and data company established by Trump ally Larry Ellison, heightening mounting apprehensions of a speculative bubble in artificial intelligence stocks. Steep Share Price Fall Comes After Revenue Miss Shares in the company plunged by over 11 percent in after-hours trading after it reported a weaker-than-anticipated fourteen percent rise in revenues to $16 billion in the latest quarter, while simultaneously disclosed plans to ramp up its artificial intelligence investment by about $15bn. The business reported weaker-than-expected three-month sales for the period ending in November, with sales at its key cloud computing business expanding at a slower pace than anticipated, at 34%. Investor Concerns Over Spending and Debt Investors were also disappointed by a slower than expected 68 percent increase in income from its infrastructure business. At the same time, the market were alarmed by the company's increased projections for AI investment. It now projects capex to jump by 40 percent to $50 billion, with the vast majority of the increase allocated for constructing data centres. This heavy spending plan comes amid a increasing debt load, with Oracle's long-term debt having increased by 25 percent over the last twelve months to reach $nearly one hundred billion dollars. "Frankly, the report was not dramatically bad, but it served to confirm worries around heavy AI spending, funded through debt, with an uncertain timeframe for revenue generation," noted a senior analyst. Wider Sector Implications and Ecosystem Risks Continued excitement about the potential of AI technology has led to a sharp rise in company valuations in recent months, but there has been a increasing chorus of cautions from policymakers and executives who argue equity prices could tumble if investors ended up being let down by the progress or commercial uptake of AI solutions. While Oracle has become an important technology provider creating enterprise solutions for large corporations worldwide and has more recently found strength in the cloud sector, analysts point to growing concerns about how reliant firms are growing on circular funding within the AI ecosystem. Oracle disclosed that its metric of contractual revenue soared by 440 percent over the past year. However, analysts were cautious when it was revealed that these commitments were driven by large deals from other tech giants like Meta and Amazon. "While these are high-quality customers, it will not soothe fears that big tech's AI investments are self-referential, which makes the sector vulnerable to a loss of market faith," commented a research director. "In summary, strong contract growth was not enough to placate fears about AI and the huge amount of investment spending required by companies to construct AI infrastructure." Ripple Effect in AI-Related Shares Additional AI and tech-related stocks subsequently slid in after-hours trading following the Oracle results. Key movers included: Nvidia: Share price fell by 1.3%. Alphabet (Google): Shares dropped by 0.3 percent. SoftBank: In Japan, the investment firm's shares tumbled by 7.7% on Thursday.