U.S. equities dipped on Thursday as Oracle Corp. signaled continued aggressive investment in artificial intelligence, reigniting investor worries about unsustainable technology spending. The S&P 500 closed 0.8% lower amid broader tech sector weakness.
- Oracle announced $20 billion in planned capital spending over the next three years, focused on AI and cloud infrastructure.
- The S&P 500 declined 0.8%, while the Nasdaq Composite fell 1.1% on the day.
- The increase in capital expenditure represents a 40% rise compared to the prior three-year capital plan.
- Market participants expressed concern over whether rising AI costs can be matched by revenue growth.
- Tech stocks were the weakest sector, with major cloud providers experiencing notable sell-offs.
- Oracle’s guidance contributed to broader caution among investors regarding technology sector profitability.
The Nasdaq Composite dropped 1.1% as concerns resurfaced over the pace and scale of AI infrastructure investments across major tech firms. Oracle’s latest earnings call highlighted a planned $20 billion capital expenditure over the next three years, primarily directed toward expanding its AI-driven cloud platform and data center capacity. This marks a 40% increase compared to the previous three-year period, underscoring the company’s commitment to maintaining leadership in enterprise AI solutions.