Oracle shares sink on thin margins report

Financial Performance - Oracle's cloud business is growing exponentially, but gross profit margins are razor thin [2] - Wall Street anticipates lower gross profit margins due to rising power and labor costs for data centers [2] - Remaining performance obligations (cloud contracts backlog) jumped 359% year-over-year [3] Market Dynamics & Investment - Oracle is becoming a key enabler in AI data center buildout, renting out NVIDIA chips [2] - Bank of America analysts cautioned that long-term profitability visibility is unclear [3] - Market is trying to understand how much margins will be impacted in the short term due to increased capital expenditure, with the stock down nearly 6% [4] - Questions emerge around better deal economics from Nvidia for high-performing AI chips [5] Company Strategy & Future Outlook - Oracle World is upcoming, with expectations for more information on growth trajectory from co-presidents and founder Larry Ellison [5] - Oracle has a history of being a leading software platform, which should translate to building value for AI workloads [4]