Oracle stock fell 5% after reports of weak 14% margins on $900 million in Nvidia cloud sales

Oracle dropped 5% on Tuesday, and it wasn’t ￰0￱ got spooked after The Information dropped a report exposing some nasty math behind Oracle’s cloud ￰1￱ report said Oracle plans to buy billions of dollars worth of Nvidia chips to rent out to AI clients like ￰2￱ sounds huge until you look at the ￰3￱ documents showed that Oracle made just 14% gross margins on $900 million in sales from that Nvidia-powered AI cloud operation over the last quarter ending in ￰4￱ that to Oracle’s usual 70% ￰5￱ gap is ￰6￱ throws a fat question mark on the company’s bold AI ￰7￱ wants to go from old-school enterprise tech to major AI infrastructure ￰8￱ these Nvidia chips don’t come ￰9￱ worse, the company is pricing its AI chip rentals too low to protect margins.

Basically, they’re spending big and earning ￰10￱ hate that combo. That’s why the stock got ￰11￱ struggles to convince investors on AI margins The report also hit Oracle right where it hurts, its future ￰12￱ in September, Oracle bragged that its remaining performance obligations, aka its cloud backlog, had exploded 359% year over ￰13￱ also tossed out some huge numbers: a forecast of $144 billion in cloud infrastructure revenue by 2030, up from just above $10 billion in 2025. A big chunk of that expected cash is tied to Oracle’s role in Project Stargate. That’s the mega-partnership with OpenAI to build five giant data centers loaded with Nvidia AI chips.

Oracle’s cloud bet is essentially stapled to OpenAI’s expansion and Nvidia’s ￰14￱ that bet goes sideways, so does Oracle’s entire growth ￰15￱ with 14% gross margins on a nearly billion-dollar segment, Wall Street isn’t impressed. Tuesday’s market action proved ￰16￱ S&P 500 dropped 0.4%, and the Nasdaq slid 0.7%, dragged down in part by Oracle’s poor ￰17￱ the Dow dipped 147 points, or 0.3%. Oracle’s slide was one of the biggest reasons for that ￰18￱ investors had been hyped about AI ￰19￱ this report showed the numbers might not live up to the ￰20￱ shutdown adds pressure to Oracle selloff Then there’s Washington’s ￰21￱ ￰22￱ shutdown entered its second week on Tuesday, adding even more ￰23￱ Trump, now back in the spotlight, took to Truth Social Monday night to aim at ￰24￱ wrote, “happy to work with the Democrats on their Failed Healthcare Policies, or anything else, but first they must allow our Government to re-open.” Earlier that day, he told reporters in the Oval Office that there were talks happening that could “lead to very good things” on ￰25￱ Senate Minority Leader Chuck Schumer wasn’t having ￰26￱ fired back on X (formerly Twitter): “THIS ISN’T TRUE.” He also said Democrats are “ready to make it happen” if Republicans actually want to talk about healthcare for ￰27￱ don’t like chaos, and that’s exactly what this back-and-forth ￰28￱ rushed to safer ￰29￱ futures shot up to $4,000 per ounce, a record high.

Meanwhile, cloud-heavy stocks like Oracle got ￰30￱ longer the shutdown drags on, the worse it ￰31￱ workers, like TSA agents and air traffic controllers, are missing ￰32￱ active-duty military could go unpaid if Congress doesn’t fix it ￰33￱ asked if furloughed workers would get back pay, Trump said, “depends on who we’re talking about.” If you're reading this, you’re already ￰34￱ there with our newsletter .