Oracle $ORCL ( ▲ 7.58% ) slid more than 6 percent Friday after Bloomberg reported that several data centers the company is building for OpenAI will be delayed from 2027 to 2028. The setback is reportedly tied to labor and material shortages, underscoring how difficult it is to execute on the massive cloud buildouts Oracle has been promising.
The company has been pouring far more into capital spending than Wall Street expected. After reporting fiscal Q2 results earlier this week, management raised full year capex plans by 15 billion dollars. Even with the spending increase, it still appears Oracle is struggling to keep its largest projects on schedule.
Oracle already disappointed investors with weaker than expected cloud infrastructure revenue in fiscal Q2, a sign that markets were skeptical of how quickly the company could convert its enormous remaining performance obligations into real sales. Today’s report only deepened those concerns, and traders are betting that delayed data centers will push out revenue for everything that fills them.
A long list of AI linked stocks fell on the news. Nvidia $NVDA ( ▲ 3.74% ) and AMD $AMD ( ▲ 6.87% ) dropped, with AMD under pressure after previously agreeing to deploy 50,000 AI chips in Oracle facilities. AI focused REITs like Equinix $EQIX ( ▲ 2.31% ) and Digital Realty $DLR ( ▲ 2.38% ) also slid. So did infrastructure names tied to data center buildouts and power systems, including Dell $DELL ( ▲ 3.05% ) , Constellation Energy $CEG ( ▼ 0.35% ) , Arista Networks $ANET ( ▲ 5.65% ) , Corning $GLW ( ▲ 2.42% ) , Generac $GNRC ( ▲ 1.19% ) , Quanta Services $PWR ( ▲ 1.41% ) , Vistra $VST ( ▼ 1.34% ), and Eaton $ETN ( ▲ 0.62% ).