ORCL: Oracle Stock Sheds 2.5% After Internal Data Shows AI Rentals Are Churning Out Losses

Shares of the tech titan were lower by more than 7% before trimming session losses. Still, is renting out AI servers really that attractive? A report says it isn’t.

💾 AI Rentals Aren’t a Goldmine

• Oracle stock ORCL fell 2.5% Tuesday after The Information leaked internal data showing its AI-rental business is losing money — big money (in conventional terms).
• In the three months ending August, Oracle lost nearly $100 million renting out Nvidia’s high-end Blackwell chips.
• Timing was likely the decisive factor. The report says profits are lagging as Oracle ramps up infrastructure — building out data centers and onboarding customers — before cash starts rolling in.
• The article also says that Oracle’s fast-growing cloud unit posted just $125 million in gross profit on AI server rentals in that same three-month stretch. That’s a thin 14% margin that has Wall Street wondering whether the AI infrastructure boom is more hype than harvest.

📉 Not Just an Oracle Problem

• The report sparked an AI-sector pullback. Oracle stock plunged more than 7% intraday before trimming the bigger chunk of the losses.
• The AI dominoes kept falling — Alphabet GOOGL dropped 1.9%, CoreWeave CRWV slid 3.8%, and even Nvidia NVDA reversed from a 2% morning gain to end in the red. Investors, it seems, realized that renting GPUs isn’t always a license to print money.
• Still, not everyone in AI land got wrecked. AMD AMD surged 3.8%, adding to Monday’s 24% rocket after unveiling a multi-billion-dollar deal with OpenAI. The situation is shaping up as an AMD vs. Nvidia showdown with a rare win for the smaller player.

⚙️ Inevitable Cracks in the AI Buildout

• Oracle has been one of the newcomers to the AI trade, soaring in September after landing mega-contracts with OpenAI, Nvidia, and CoreWeave worth hundreds of billions combined.
• But the report shows that “scale first, profit later” may be the unspoken motto of AI infrastructure firms. Setting up massive GPU farms is expensive, and Oracle’s margins might not catch up until 2026 or beyond.
• Still, not many investors expect to see profits that early in the cycle. And that’s what likely saved the stock from a deeper dip. The “AI cloud” may be less like minting money and more like running an ultra-expensive power plant that’s not yet plugged in.