Oracle stock (ORCL) fell sharply on Thursday on concerns over heavy investments in AI and a disappointing third-quarter earnings report. At the same time, Oracle reported fiscal second-quarter revenue of $16.06 billion, up 14% year over year but below the $16.21 billion expected by analysts tracked by Bloomberg. While results were mixed but strong, it was the company’s announced AI spending plans that spooked some Wall Street experts.
After the bell Wednesday, Oracle reported capital spending of $12 billion in its fiscal second quarter, up from about $4 billion a year earlier and about $8 billion expected by analysts tracked by Bloomberg. The AI cloud company also raised its full-year capital spending outlook to $50 billion from its previous estimate of $35 billion.
Concerns over rising AI spending spread to other AI stocks on Thursday, with Nvidia (NVDA) and AMD slightly lower. Analysts have noted that Oracle’s report could trigger a boom or bust in AI stocks heading into 2026. Several AI-related cryptocurrencies also fell, with some dropping more than 7% in a single day. Barclays analyst Raimo Lenschow wrote earlier this week: “We expect Oracle’s second-quarter results to be another significant event, especially as sentiment towards the AI infrastructure market has become more negative in recent months due to growing concerns about an AI bubble and funding concerns for both Oracle and its major customer (OpenAI).”
However, concerns about increased spending on AI initiatives appear to have had the opposite effect, reigniting fears of an AI bubble. Thursday’s drop in Oracle’s stock price was ORCL’s biggest single-day loss since January 2025. The stock is up more than 19% since the beginning of the year, but most of that gain could be wiped out by early 2026.
