Oracle's AI spending surge sparks bubble concerns

Core Viewpoint - Oracle's shares dropped nearly 12% in after-hours trading following weaker-than-expected revenue for Q2, attributed to increased spending on AI infrastructure and a lack of clarity on financing plans [1][6]. Financial Performance - Oracle's order backlog surged 438% to $523 billion, driven by new commitments from companies like Meta and Nvidia [2]. - Despite the drop in share price, Oracle's stock is still up 34% year-to-date, although it has experienced significant volatility, with a low of $122 and a recent high of around $328 [10]. Investment Concerns - Investors expressed concerns over Oracle's unclear strategy for financing its capital expenditures, particularly regarding its AI buildout [5][6]. - The company is expected to raise less than $100 billion for its spending plans, a figure that analysts have been monitoring closely [7]. - The broader tech sector is facing pressure as investors grow wary of companies increasing capital expenditures through debt [8]. Market Reactions - Following Oracle's results, shares of Nvidia, AMD, and Coreweave also declined, indicating a ripple effect across the tech industry [2]. - The world's largest sovereign wealth fund has stated it is cautious about investing in data centers due to volatility in the sector [2][3].