A sell-off for Oracle is weighing on Wall Street as investors question whether its big spending on artificial-intelligence technology will pay off. The S&P 500 fell 0.2% Thursday and pulled further from its all-time high set in October. Drops for AI-related stocks dragged the Nasdaq composite dow.
— Most U.S. stocks are rising on Thursday, but a sell-off for Oracle is weighing on Wall Street as investors question whether its big spending on artificial-intelligence technology will pay off.
The S&P 500 slipped 0.2% and pulled further from its all-time high, which was set in October. Drops for AI-related stocks dragged the Nasdaq composite down 0.7%, while the Dow Jones Industrial Average was doing much better with a gain of 420 points, or 0.9%, as of 10:30 a.m. Eastern time.
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Oracle tumbled 12.7% and at one point in the morning was on track for its worst day since 2001, when the dot-com bubble was still deflating. Its 14% growth in revenue for the latest quarter came up just short of analysts’ expectations even though it reported a better profit than analysts expected.
Doubts also remain about whether all the spending that Oracle is doing on AI technology will produce the payoff of increased profits and productivity that proponents are promising. Analysts said they were surprised by how much Oracle may spend on AI investments this fiscal year, and questions continue about how the company will pay for it.
Such doubts are weighing on the AI industry broadly, even as many billions of dollars continue to flow in. They had helped drag the broad U.
