Oracle’s Miss Stirs Fresh AI Bubble Jitters

Markets that had rallied on the Federal Reserve’s latest rate cut, which trimmed the policy rate by 25 basis points and briefly pushed the dollar down toward 102 on the DXY, lost steam overnight as renewed questions about the durability of the AI boom took hold. Futures turned lower across the board, with the Nasdaq 100 slipping roughly 1%, the S&P 500 down 0.79%, and the Dow easing 0.44%. 

Asian indices followed suit, while European markets opened softer as investors digested disappointing numbers from Oracle. The stock fell almost 12% in pre-market trading after the company missed revenue expectations and signalled a major jump in capital expenditure tied to AI data-centre expansion. The full-year revenue outlook held steady at $67 billion, but investors were more focused on the liabilities side of the balance sheet, where bond-funded debt has grown rapidly.

Oracle now expects FY2026 capex to rise by about 40% to nearly $50 billion, much of it earmarked for AI infrastructure supporting clients such as OpenAI. Yet revenue from its cloud infrastructure division, the very engine meant to absorb that investment, landed at only $4.1 billion, below forecasts. 

What Does This Mean for Me?

With shares already down 40% from their September peak, when OpenAI’s multiyear $300 billion compute commitment briefly propelled Larry Ellison to the top of global wealth rankings, traders worry the company is overexposed to a narrow, competitive segment where Google, Microsoft, and Amazon continue to dominate.

The unease spread across the sector: Nvidia slipped 1.58% pre-market, and CoreWeave dropped 3.27%, underscoring how quickly sentiment can turn when valuations outpace fundamentals.