Oracle shares sink on thin margins report

Core Insights - Oracle's shares are declining due to reports indicating challenges in profitability from renting Nvidia chips despite growth in its cloud business [1][2] - The company is experiencing "razor thin" gross profit margins, which are lower than Wall Street expectations, attributed to rising power and labor costs [2][4] Company Performance - Oracle's cloud contracts backlog surged by 359% year-over-year, indicating strong demand for its services [3] - Analysts express concerns about the visibility of long-term profitability, despite Oracle's historical success as a leading software platform [3][4] Market Dynamics - The market is assessing the impact of increased capital expenditures on Oracle's margins, with uncertainty about the timeline for profitability improvements [4] - There are questions regarding whether Oracle can negotiate better economics with Nvidia as it continues to purchase high-performing AI chips [4][5] Upcoming Events - Oracle World is set to take place in Las Vegas, where key executives, including co-founder Larry Ellison, are expected to provide insights on the company's growth trajectory [5]