STORY: Shares of Oracle slumped as much as 16.5% Thursday morning as fresh worries over the company's hefty spending on artificial intelligence sparked fears of an AI bubble.
If the losses hold, Oracle would shed more than $90 billion in market value.
The tech giant a day earlier forecast sales and profit that missed Wall Street estimates.
It also warned that it would likely spend $15 billion more than planned in order to attract AI cloud-computing customers.
Investors saw it as a sign that the massive amounts of money Oracle is pouring into its AI efforts is not turning into profit as fast as Wall Street had hoped.
Oracle's warnings come amid investor fears of a broader AI bubble, stoked by sky-high valuations, limited real-world productivity gains and complex circular investments, even as companies raise billions in debt to build AI infrastructure.
In a bid to compete with industry giants like Amazon, Microsoft and Google, Oracle has signed cloud-computing deals with OpenAI and others, which has helped its stock climb nearly 34% this year.
Analysts have said a big portion of Oracle's spending is tied to OpenAI-related data centers.
Oracle's five-year credit default swaps, which offer bondholders a hedge against default, have shot to record highs as it borrows heavily for the data center buildout.
Oracle's gloomy forecasts dragged down shares of other tech stocks, with Nvidia, Micron and CoreWeave all lower in Thursday morning trading.
