Oracle rose in premarket trading on Wednesday as the multinational tech conglomerate looks to cut thousands of jobs to free up cash to build AI data center infrastructure.

The software giant has started telling its 162,000-strong workforce that thousands of people will be affected in a new round of layoffs, two people familiar with the matter told CNBC on Tuesday. Its shares were last up 2.6% in early market trading on Wednesday. Oracle declined to comment on CNBC’s report.

Investors remain uneasy about the company’s hefty capital expenditure on data centers that can handle AI workloads. While shares closed up nearly 6% Tuesday, Oracle’s stock is down roughly 25% so far this year.

The company announced plans in early February to fundraise up to $50 billion during the 2025 calendar year through a mixture of debt and equity, to expand capacity for contracted cloud demand from customers, including Nvidia, Meta, OpenAI, Advanced Micro Devices and xAI.

Major AI hyperscalers Alphabet, Microsoft, Meta and Amazon have also committed to capital expenditure of nearly $700 billion to fund their AI buildouts this year, which has alarmed investors as it will reduce the companies’ free cash flow without a clear promise on near-term returns.

Job cuts at Oracle will help free up cash flow, Barclays analysts said in a note on Thursday. The investment bank said it is its overweight rating of the stock.

“Given ORCL’s existing FY26 Restructuring Plan and prior reports, we do not see today’s layoffs as being a surprise to the market, which seemed to have appreciated the cost savings potential from ORCL’s actions amidst the company’s rapid build-out of AI infrastructure capacity,” the analysts said.

Barclays also highlighted that Oracle generates less profit per employee than its competitors, with workers less productive compared to the average. The analysts expect that Oracle will triple its revenue over the next few years due to minimal headcount growth and low operating costs.

A federal judge in San Francisco granted Anthropic’s request for a preliminary injunction in its lawsuit against the Trump administration. 

Judge Rita Lin issued the ruling on Thursday, two days after lawyers for the artificial intelligence startup and the U.S. government appeared in court for a hearing. Anthropic sued the administration to try to reverse its blacklisting by the Pentagon and President Donald Trump’s directive banning federal agencies from using its Claude models.

Anthropic sought the injunction to pause those actions and prevent further monetary and reputational harm as the case unfolds. The order bars the Trump administration from implementing, applying or enforcing the president’s directive, and hampers the Pentagon’s efforts to designate Anthropic as a threat to U.S. national security. 

“Punishing Anthropic for bringing public scrutiny to the government’s contracting position is classic illegal First Amendment retaliation,” Lin wrote in the order. A final verdict in the case could still be months away. 

During Tuesday’s hearing, Lin pressed the government’s lawyers about why Anthropic was blacklisted. Her language in Thursday’s order was even sharper.

“Nothing in the governing statute supports the Orwellian notion that an American company may be branded a potential adversary and saboteur of the U.S. for expressing disagreement with the government,” she wrote.

Following the ruling, Anthropic said it’s “grateful to the court for moving swiftly.”

“While this case was necessary to protect Anthropic, our customers, and our partners, our focus remains on working productively with the government to ensure all Americans benefit from safe, reliable AI,” the company said in a statement.  

Anthropic’s suit earlier this month followed a dramatic couple weeks in Washington D.C., between the Department of Defense and one of the most valuable private companies in the world.

In a post on X in late February, Defense Secretary Pete Hegseth declared Anthropic a so-called supply chain risk, meaning that use of the company’s technology purportedly threatens U.S. national security. In early March, the DOD officially notified Anthropic about the designation via a letter.

Anthropic is the first American company to publicly be named a supply chain risk, as the designation has historically been reserved for foreign adversaries. The label requires Defense contractors, including Amazon, Microsoft, and Palantir, to certify that they do not use Claude in their work with the military. 

The Trump administration relied on two distinct designations – 10 U.S.C. § 3252 and 41 U.S.C. § 4713 – to justify the action, and they have to be challenged in two separate courts. Because of that, Anthropic has filed another lawsuit for a formal review of the Defense Department’s determination in the U.S. Court of Appeals in Washington. 

Shortly before Hegseth declared Anthropic a supply chain risk, President Donald Trump wrote a Truth Social post ordering federal agencies to “immediately cease” all use of Anthropic’s technology. He said there would be a six-month phase-out period for agencies like the DOD.

“WE will decide the fate of our Country — NOT some out-of-control, Radical Left AI company run by people who have no idea what the real World is all about,” Trump wrote.

The Trump administration’s actions surprised many officials in Washington who had come to admire and rely on Anthropic’s technology. The company was the first to deploy its models across the DOD’s classified networks, and it was championed for its ability to integrate with existing Defense contractors like Palantir. 

Anthropic signed a $200 million contract with the Pentagon in July, but as the company began negotiating Claude’s deployment on the DOD’s GenAI.mil AI platform in September, talks stalled.

The DOD wanted Anthropic to grant the Pentagon unfettered access to its models across all lawful purposes, while Anthropic wanted assurance that its technology would not be used for fully autonomous weapons or domestic mass surveillance. 

The two failed to reach an agreement, and now, the dispute will be settled in court. 

“Everyone, including Anthropic, agrees that the Department of [Defense] is free to stop using Claude and look for a more permissive AI vendor,” Lin said during the hearing Tuesday. “I don’t see that as being what this case is about. I see the question in this case as being a very different one, which is whether the government violated the law.

WATCH: Anthropic vs. Pentagon hearing

Amazon Web Services said it was once again facing service disruptions in Bahrain on Monday, as a result of the ongoing conflict ‌in the Middle East.

“We are working closely with local authorities and prioritizing the safety of our personnel throughout our recovery efforts,” a spokesperson said in a statement shared with CNBC. 

AWS advised customers to migrate their applications to alternate AWS Regions, and said it had already helped a large number of users to do so. 

It comes after the cloud provider reported service disruption related to the Iran conflict in Bahrain and the UAE earlier in March.

In the UAE, two AWS facilities were directly struck by drones. In Bahrain, a drone strike landed in close proximity to company facilities and caused physical damage.

These previous AWS disruptions caused reported outages of apps and digital services in the UAE.

In recent weeks, Iran has continued to launch missile and drone strikes on its Middle East neighbors as part of its retaliation against Israel and the U.S.

Meta has signed a new long-term agreement to spend up to $27 billion on Dutch cloud provider Nebius‘ AI infrastructure, the company announced on Monday.

Nebius’ shares surged 14% in premarket trading.

Over the next five years, Nebius will provide $12 billion of dedicated capacity across a number of locations, including on what the company says will be one of the first large-scale deployments of Nvidia’s latest AI-specialist Vera Rubin chips.

Meta has also committed to purchase additional available compute capacity from Nebius, worth up to a total of $15 billion over five years.

Netherlands-based Nebius has emerged as a leading European player in the rapidly developing AI cloud computing space. The company has seen its share price increase more than 400% since listing in New York in 2024.

“We are pleased to expand our significant partnership with Meta as part of securing more large, long-term capacity contracts to accelerate the build-out and growth of our core AI cloud business,” Arkady Volozh, founder and CEO of Nebius, said in a statement.

Citi said Monday it was initiating coverage of Nebius with a buy/high risk rating, which it noted was supported by a “differentiated view on AI datacenter [total addressable market] growth, margin improvement and NBIS’s capital-efficient scaling.”

Meta is part of a group of hyperscalers planning huge spending as they race to build out infrastructure to power the AI boom.

The company said its AI-related capital expenditure would hit between $115 billion and $135 billion this year, as part of a combined $700 billion in spending by hyperscalers including Amazon, Alphabet and Microsoft.

It comes as investors pile into the AI cloud computing sector. U.K.-based AI data center startup Nscale announced it had raised $2 billion at a $14.6 billion valuation last week, from investors including Nvidia.

The chip giant also announced it would invest $2 billion in Nebius last week, which saw the Dutch company’s stock pop 16%.

Nebius was founded in 2022 after a restructuring of Russian company Yandex’s operations based outside of its home market and listed in New York in 2024. Its share price rose more than 200% in 2025 and has increased by 35% so far in 2026.

The company also inked a deal to deliver computing resources to Microsoft, worth up to $19.4 billion over five years, in September.

Amazon‘s data center in Bahrain was targeted by Iran’s Islamic Revolutionary Guard Corps for the company’s support of the U.S. military, Iranian state media said Wednesday.

The company’s cloud computing unit said Monday that one of its facilities in Bahrain was damaged due to a nearby drone strike on Sunday. Two data centers in the United Arab Emirates were also damaged after they were “directly struck” by drones.

All of the facilities remain offline, according to the Amazon Web Services health dashboard.

The attack in Bahrain was launched “to identify the role of these centers in supporting the enemy’s military and intelligence activities,” Iran’s Fars News Agency said on Telegram.

The incidents came after joint U.S.-Israel strikes on Iran over the weekend. Iran has retaliated against Israeli and U.S. bases across the Gulf.

Amazon declined to comment.

In addition to structural damage, the data centers also experienced power disruptions and some water damage after firefighters worked to put out sparks and fire. Some popular AWS applications experienced “elevated error rates and degraded availability” due to the incident.

AWS advised cloud customers to back up their data, consider migrating their workloads to other regions and direct traffic away from Bahrain and the UAE.

AWS announced its Bahrain region in 2019, and it hosts significant workloads for governments there. The company also operates a corporate office in Bahrain that is primarily for AWS employees.

Earlier this week, Amazon instructed all of its corporate employees in the Middle East to work remotely and “follow local government guidelines” amid escalating instability in the region.

Salesforce shares tumbled 5% in extended trading on Wednesday after the customer service software maker reported healthy results, although its fiscal 2027 revenue view trailed Wall Street projections.

Here’s how the company did in comparison with LSEG consensus:

• Earnings per share: $3.81 adjusted vs. $3.04 expected
• Revenue: $11.20 billion vs. $11.18 billion expected

Salesforce’s revenue grew 12% year over year in its fiscal fourth quarter, which ended on Jan. 31, according to a statement. It’s the company’s fastest growth rate in two years.

The company has allocated $50 billion for new share buybacks, “because these are some low prices,” CEO Marc Benioff said on a conference call with analysts. As of Wednesday’s close, Salesforce shares had fallen about 28% so far in 2026, while the S&P 500 index had gained 1%.

Net income of $1.94 billion, or $2.07 per share, increased from $1.71 billion, or $1.75 per share. Adjusted earnings per share excludes stock-based compensation expense, amortization of purchased intangible assets and restructuring costs.

Current remaining performance obligation, a sum of contracted but unrecognized revenue and unbilled amounts that will be recognized as revenue over the next year, came in at $35.1 billion. The figure was higher than StreetAccount’s $34.53 billion consensus.

Guidance for the fiscal first quarter included $3.11 to $3.13 in adjusted earnings per share on $11.03 billion to $11.08 billion in revenue. Analysts surveyed by LSEG were looking for $3.00 per share and $10.99 billion in revenue.

For the 2027 fiscal year, Salesforce called for $13.11 to $13.19 in adjusted earnings per share on $45.8 billion to $46.2 billion in revenue, which implies 10% to 11% growth. The LSEG consensus had $13.12 per share on $46.06 billion in revenue.

In recent weeks, investors have become increasingly worried that generative artificial intelligence models might dampen major software companies’ growth opportunities.

On Monday, IBM stock dropped 13% in its worst daily performance since 2000 after Anthropic published a blog post saying its Claude Code AI tool for developers can assist with modernizing code written in the Cobol programming language.

During the quarter, Salesforce released an AI-enabled Slackbot assistant in its Slack team communication app for paying clients. The company also completed its $8 billion Informatica acquisition and announced plans to buy marketing company Qualified. Informatica, a data management software company, contributed $399 million in revenue during the quarter.

The company now sees $63 billion in fiscal 2030 revenue, up from a target of over $60 billion it presented in October. Analysts polled by LSEG had been looking for $59.07 billion. The new number includes a contribution from Informatica.

Five customers of ServiceNow moved to Salesforce’s competing product for information technology service management during the quarter, Benioff said on the TBPN podcast on Wednesday.

Salesforce has been working to expand adoption of its Agentforce AI technology for automating customer service and other corporate functions.

The company said annualized Agentforce revenue exceeded $800 million in the quarter.

Morgan Stanley analysts, with the equivalent of a buy rating on Salesforce stock, said in a Monday note to clients that conversations with partners “continue to indicate we are in the early innings.”

Meanwhile, Salesforce is seeing a benefit from its stake in Anthropic, generating an $811 million gain on strategic investments in the quarter. That’s up from $96 million in the year-ago quarter.

“I think we just put another $100 million into the new round,” Benioff said. We’re [at] about $330 million into Anthropic invested. It’s almost about 1% of Anthropic. And believe me, I wish we had invested a lot more.”

Benioff said the company isn’t doing all that it can with debt.

“We’re just very under-leveraged on our balance sheet,” he said.

WATCH: Investors are paying less and less for software earnings these days, says Jim Cramer

Software stocks made a comeback on Tuesday after Anthropic hosted its enterprise agents event, where it revealed new partnerships, quelling some investor fears that the sector could be displaced by artificial intelligence.

The AI startup launched new updates to Claude Cowork that allow companies to integrate the productivity tool into a host of enterprise apps, such as Salesforce-owned Slack, Intuit, Docusign, LegalZoom, FactSet and Google‘s Gmail.

Organizations can also deploy customizable plugins across sectors like financial analysis, engineering and human resources, Anthropic said.

Salesforce shares jumped 4% following the Anthropic announcement while Docusign and LegalZoom each gained more than 2%. Thomson Reuters‘ stock surged more than 11% and FactSet shares rose nearly 6%.

Analysts at Wedbush Securities said in a Tuesday research note that Anthropic’s event showed the competition risk to software from AI is “overblown.”

They argued that models aren’t capable of replacing entire workflows that remain “deeply embedded” in software infrastructure.

“The reality is that these new AI tools will not rip and replace existing software ecosystems and data environments with these AI tools only as useful as the data it can reach,” the analysts wrote.

Anthropic’s recent product rollouts have sent software and cybersecurity stocks tumbling in recent weeks as investors digested the looming threat of AI tools to those business models.

CrowdStrike closed largely flat Tuesday, but many of those stocks climbed higher. Okta and Cloudflare rose about 2%. Zscaler and Tenable each gained about 4% and SentinelOne climbed 3%.

IBM shares sold off heavily on Monday after Anthropic touted a tool that could automate aspects of a programming language run on IBM’s computers. IBM’s stock rebounded Tuesday, climbing more than 2%.

— CNBC’s Ashley Capoot and Kate Rooney contributed reporting to this story.

Software stocks have been hammered in recent weeks as investors worry about threats from artificial intelligence. In the startup world, Canva has been among the highest fliers due to its popularity with designers, but that market is showing vulnerability, with larger rival Adobe down 30% so far this year.

As Canva reckons with dramatic changes in the market, the design software vendor is getting acquisitive. The company said Monday that it’s purchased two startups — Cavalry and MangoAI — that stand to help it challenge Adobe.

Cavalry, a four-person startup, sells subscriptions to software for creating two-dimensional animations. MangoAI is a stealth-mode company, whose technology can be used for creating short videos for advertising. Terms of the deals weren’t disclosed.

Cameron Adams, Canva’s co-founder and product chief, told CNBC that customers have been asking what the company can offer in motion graphics. Cavalry, which Canva has used for its own projects, has gained attention among designers on social media as an alternative to Adobe’s After Effects for some work.

Canva will continue to operate Cavalry for people to use and buy independently, while also incorporating the animation technology into the core Canva product and the Affinity application for professional designers. Canva bought Affinity in 2024 and made it free in October.

Amazon, ByteDance, Google, and OpenAI all have employees that are paying customers, according to Cavalry’s website.

Canva plans to incorporate MangoAI into the Canva Grow advertisement generator, which is available through its business tier at $250 per person per year. The MangoAI technology is able to track video performance and make recommendations.

“There’s a whole bunch that goes into creating the right video,” Adams said. That includes “being able to cut stuff down, being able to repurpose content from other campaigns and put it together, being able to take a great call to action that happens at the end of one video and then append it to the hook that happens in another video,” he said.

“Analyzing all of that across your campaigns is the full vision of Canva Grow, and Mango will help enable that,” Adams added.

Canva said it ended 2025 with over $4 billion in annualized revenue, up 36% from a year prior. Adobe reported $6.2 billion in revenue for the November quarter, up 10%. Adobe’s market capitalization stood at $101 billion on Monday, while Canva said in August that it had been valued at $42 billion in a secondary share sale, before the recent plunge in software stocks.

Adams said Canva has seen instances of people directing generative AI models to create content such as slide presentations and social media posts. But AI can’t do everything, he said.

“AI is great at getting you to 80%,” Adams said. “That last 20% where you’re confident that you can push this piece of content out and truly represent your brand and speak to your audience and achieve the goals that you want to achieve is vital to have, and that last 20% is really tricky to do.”

Canva, which now has over 5,000 employees, is not currently raising a new funding round, Adams said.

“Our revenue growth has not stopped, our user growth has not stopped, and the quality of our product is getting better and better with the inclusion of AI,” he said.

WATCH: Investors are paying less and less for software earnings these days, says Jim Cramer