Oracle has reportedly cut jobs within its fast-growing cloud infrastructure business. Oracle stock slipped in Wednesday trading.
The database technology giant cut jobs within Oracle Cloud Infrastructure, Bloomberg reported, citing unnamed sources. The number of cuts is not known. Oracle did not immediately respond to a request for comment from IBD. Industry news publication Datacenter Dynamics reported that the cuts are within the U.S. and India operations for OCI.
OCI has helped power a rally for Oracle stock that has seen share rally more than 45% year-to-date, along with an 82% gain from 12 months ago. OCI is a smaller but fast-growing challenger to Amazon and Microsoft in the market for renting cloud computing services to enterprises. Oracle got a big boost last month when it announced it will develop 4.5 gigawatts of data center capacity for ChatGPT creator OpenAI.
Oracle is investing significantly to build up the data center infrastructure required for AI-related demand. Other tech giants such as Microsoft, Amazon and Meta Platforms have cut jobs to save on costs in other parts of the business, the Bloomberg report noted.
Oracle Stock Near Record Highs
On the stock market today, Oracle stock shed more than 4% to 243.57 in recent trades. Shares broke decisively below Oracle's 21-day moving average for the first time since its strong rally began in late April.
Along with the layoff news, investors could be reacting to an earning report late Tuesday from AI-focused cloud provider CoreWeave.
CoreWeave stock is down 18% in recent trading. The Nvidia-backed CoreWeave reported a higher-than-expected second-quarter loss while revenue beat Wall Street estimates, helped by AI demand. CoreWeave said demand is still out-stripping capacity for data centers, underscoring supply constraints that Amazon, Oracle and Microsoft have highlighted in recent quarters as well.
Microsoft stock was down 1.2% at 522.91 in recent action. Amazon stock was ahead Wednesday, likely helped by news of an expansion for its grocery delivery operations.
Nvidia stock was down less than 1% at 181.64 in recent action Wednesday afternoon.
