Oracle stock slides after company unveils soaring AI spending

Oracle shares fell after the company reported strong fiscal fourth-quarter results and laid out a far heavier spending plan for its AI infrastructure buildout.

The stock was reported down about 11% in early trading on June 11 after Wall Street focused less on Oracle's quarterly beat and more on how much the company plans to spend to keep expanding its cloud and data-center capacity.

Earnings beat, then spending shock

Oracle's latest report showed rapid growth in its cloud infrastructure business and a very large backlog of contracted work. Reporting cited cloud infrastructure revenue of about $5.8 billion in the quarter, up roughly 93% from a year earlier, and remaining performance obligations of about $638 billion.

But investors reacted to the capital spending outlook. Market reports said Oracle spent about $55.7 billion on capital expenditures in fiscal 2026, and Chief Financial Officer Hilary Maxson said the company expects about $70 billion in net cash outlay for capital expenditures in fiscal 2027.

Maxson also said that figure could rise by another $20 billion to $25 billion once prepayments and customer-related impacts are included.

Why investors pulled back

The company reaffirmed its fiscal 2027 revenue target of $90 billion rather than raising it, which left investors weighing a faster-rising expense base against the pace of near-term growth.

That gap is what appeared to unsettle the market: Oracle is committing heavily to AI data centers, but the spending plan keeps free cash flow and financing questions in focus.

Analysts and investors are also watching whether Oracle will need to explain more about the timing of the buildout, the use of customer prepayments, and how much of the spending will ultimately be funded through other sources.

What to watch next

The next updates to watch are any Oracle clarification on funding, capex timing and customer prepayment assumptions, along with analyst revisions to earnings models and price targets.

For now, the message from the market was clear: strong AI demand is not enough on its own if the cost of scaling the business keeps climbing faster than expected.