Are Oracle's Earnings a Sign of Trouble Ahead for Artificial Intelligence (AI) Stocks?

Core Insights - Artificial intelligence (AI) stocks have performed exceptionally well, with the Global X Artificial Intelligence & Technology ETF rising approximately 150% since the beginning of 2023, compared to a 78% increase in the S&P 500 [1][2] Company Analysis - Oracle's recent earnings report revealed adjusted earnings per share of $2.26, surpassing estimates of $1.64, but its revenue of $16.06 billion fell short of the forecast of $16.21 billion [5] - A significant increase in AI-related spending was noted, with Oracle's capital expenditures reaching $12 billion, up from $4 billion in the previous year, and guidance for total capital expenditures for the fiscal year raised from $35 billion to $50 billion [6] - Oracle's debt has risen sharply to $108.1 billion, compared to $92.6 billion at the end of May, while current assets stand at only $34.4 billion, raising concerns about the sustainability of its AI investments [7][8]