Oracle Corp. signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, Dec. 31, 2025.
Michael Nagle | Bloomberg | Getty Images
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.
Oracle cutting thousands in latest layoff round as company continues to ramp AI spending
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.
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Microsoft CEO Satya Nadella speaks at the Microsoft AI Tour event in Munich, Germany, on Feb. 25, 2026.
Sven Hoppe | Picture Alliance | Getty Images
Microsoft just closed out its worst quarter on Wall Street since the 2008 financial crisis, as investors soured on the software giant’s prospects in artificial intelligence.
The company’s stock plunged 23% in the first quarter, a steeper drop than any of its tech peers or the Nasdaq, which fell 7% in the period. Microsoft bounced back a bit on Tuesday, alongside a broader market rally, with shares of the company gaining 3.3%, the biggest jump since July.
While Microsoft remains dominant in workplace productivity software and through its Windows operating system, the company is facing twin pressures to grow efficiently in AI while also building out its cloud AI infrastructure to support soaring demand.
Oil prices are surging because of the Iran war, potentially driving up costs for building and running data centers. And on the product side, Copilot, Microsoft’s AI assistant, has yet to show a lot of traction as users flock to competitive services from Google, OpenAI and Anthropic.
Microsoft vs. Nasdaq this year
“Redmond is in a pickle,” wrote Ben Reitzes, an analyst at Melius Research, in a note on March 23, referring to Microsoft’s headquarters in Washington state. Reitzes, who has a hold rating on the stock, said the company has to use valuable capacity from its Azure cloud to fix Copilot, but has no choice “since Copilot is needed to maintain momentum in its most profitable and largest segment.”
Microsoft declined to comment.
Meanwhile, software stocks are getting pummeled as part of an AI-inspired “SaaSpocalypse” that has pushed names like Adobe, Atlassian and ServiceNow down more than 30% this year.
“Much of traditional SaaS is dying/in likely terminal decay,” Jason Lemkin, founder of SaaStr, wrote this week in a post on X, using the acronym for software as a service. In a blog post, he noted that earnings multiples for software trail the S&P 500.
Microsoft’s multiple hasn’t been this low since the fourth quarter of 2022, when OpenAI introduced ChatGPT, according to Capital IQ data.
Gil Luria, an analyst at DA Davidson, told CNBC that the sell-off isn’t justified, and he recommends buying shares. In the latest quarter, Microsoft reported revenue growth of almost 17%, accelerating from a year earlier.
“The dislocation in the fundamental performance of Microsoft and the stock performance of Microsoft, and the valuation of Microsoft, is the biggest it’s been in decades,” Luria said. He said he expects the company’s earnings growth to outpace the broader market this year.
“There is no stickier product in all of enterprise software than Microsoft Windows and Office,” he said.
Microsoft has been trying to build a larger revenue base from productivity software with the Microsoft 365 Copilot AI add-on, but so far, just 3% of commercial Office customers have licenses for it. Luria said he has access to 365 Copilot, but that he’s not a fan. More importantly, he said, Microsoft has pricing power with Office subscriptions. The company announced plans to raise prices in December.
Suleyman’s ‘demotion’
With Copilot struggling to win over users, Microsoft said two weeks ago that Mustafa Suleyman, the former co-founder of AI lab DeepMind who had been running Copilot development for consumers, will focus on building AI models. Microsoft has tasked former Snap executive Jacob Andreou with leading the Copilot experience for consumers and commercial clients.
“There is concern that the Microsoft 365 Copilot business has not lived up to quite their expectations, and that’s an area that could see new competitors,” said Kyle Levins, an analyst at Harding Loevner, which held $219 million in Microsoft shares at the end of December.
Levins took the shake-up involving Suleyman as good news. Others did not.
“Sure sounds like a demotion at best,” former Jane Street trader Agustin Lebron wrote on X. The change followed departures of prominent executives, including gaming chief Phil Spencer and Rajesh Jha, Microsoft’s highest-ranking productivity leader, who’s retiring.
Microsoft is still getting healthy growth out of Azure, which is second to Amazon Web Services in cloud infrastructure. Revenue in the division jumped 39% in the December quarter. Finance chief Amy Hood said in January that growth could have been in the 40s if the company had allocated all of its AI chips to Azure, rather than giving some to teams operating services such as Microsoft 365 Copilot.
Azure is benefiting from a massive backlog of business from OpenAI and Anthropic. Microsoft’s commercial remaining performance obligations at Azure more than doubled in the December quarter from a year earlier to $625 billion.
It’s a reminder that, among tech’s hyperscalers, Microsoft was viewed as an early mover in generative AI due to its 2019 investment in OpenAI and strategic partnership with the startup. But the companies no longer have an exclusive arrangement when it comes to cloud infrastructure and are now competing in a number of areas.
In February, OpenAI announced a service called Frontier that the company said “helps enterprises build, deploy, and manage AI agents that can do real work.”
Microsoft CEO Satya Nadella has been wearing a brave face, promoting the company’s AI enhancements on social media.
“It’s a lot of intense competition, but it’s not so zero-sum, as some people make it out to be,” he said in January.
Aaron Foresman, managing director of equity research at Crawford Investment Counsel, a Microsoft investor, said Nadella’s continuing presence is crucial for the company that he’s been leading since replacing Steve Ballmer in 2014.
“We’ve got a lot of trust and confidence in Satya,” Foresman said.
WATCH: Bank of America’s Tal Liani talks reinstating Microsoft as a ‘buy’
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CEO and co-founder of Anthropic Dario Amodei speak onstage during the 2025 New York Times Dealbook Summit at Jazz at Lincoln Center on December 03, 2025 in New York City.
Michael M. Santiago | Getty Images
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
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Deteriorating asset quality, collateral markdowns and a growing rush for the exits are rattling private credit markets and prompting comparisons to the Global Financial Crisis.
But a spike in loan defaults, while painful, could help shake out pockets of stress from the $3 trillion sector and provide what one industry pro calls a “healthy reset” after its first major liquidity test.
Ares Management on Tuesday opted to curb investor withdrawals from its $10.7 billion private credit fund, just a day after Apollo Global Management unveiled similar measures in one of its vehicles. Ares has capped redemptions in its Ares Strategic Income Fund at 5%, after withdrawal requests surged to 11.6%, according to a Bloomberg report.
Other managers, including Blue Owl Capital and Cliffwater, have also scrambled to halt or restrict withdrawals in recent weeks, as rising default fears spark an investor retreat from the sector.
Comparisons to the build-up to the 2008 Global Financial Crisis are now intensifying as concerns over underlying loan quality grow.
Morgan Stanley recently warned default rates in private credit direct lending could surge to 8%, well above the 2-2.5% historical average, with pressure concentrated in sectors vulnerable to AI disruption, such as software.
‘Significant but not systemic’
However, Morgan Stanley analysts led by strategist Joyce Jiang also said an 8% default spike would be “significant but not systemic,” pointing to lower leverage among private credit funds and business development companies compared with 2008.
Ares Management.
So what would a default spike of that magnitude look like in practical terms?
“An 8% default rate takes private credit from a ‘zero loss’ fantasy to a more normal credit asset class — painful in spots, but ultimately a healthy reset that frees up capital for stronger businesses,” said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James.
She said a normalization from ultra‑low defaults would be “painful for some funds” but “healthy for the asset class if it forces better underwriting and more realistic valuations.”
An 8% or 9% default rate would largely manifest through so-called “shadow defaults,” such as maturity extensions and covenant waivers, said William Barrett, managing partner at Reach Capital. Lenders use these “amend-and-pretend” tools to keep borrowers afloat and avoid immediate bankruptcy.
While payment-in-kind agreements delay cash returns, increase debt, and potentially signal greater stress in the system, they also act as an effective “release valve” that stabilizes companies and prevents outright failures, he added.
Apollo Global Management.
“For the real economy, this means capital becomes trapped in restructurings, leading to tighter future lending conditions,” Barrett told CNBC via email.
Attention has since shifted to software exposure in direct lending — estimated at around 26%, according to Morgan Stanley — after fears that agentic AI could disrupt the software-as-a-service model sent publicly-listed SaaS stocks plunging.
Software is the largest sector in the Apollo Debt Solutions BDC, at more than 12%. Blue Owl is also heavily exposed to SaaS lending.
Blackstone‘s flagship private credit fund BCRED, which also saw a surge in redemption requests during the first quarter, was down 0.4% in February, its first monthly loss in three years. It came as the fund marked down a number of loans, including debt linked to SaaS company Medallia, according to an FT report.
But these are not the only pressure points, industry pros say.
“AI-exposed software is just the first fault line — the real risk is across any highly-levered, rate-sensitive borrower whose business model was priced for free money, especially in the U.S. where private credit grew fastest,” Haldea told CNBC via email.
Funds concentrated in volatile sectors or holding covenant-lite loans with weaker protections are also vulnerable, as are highly leveraged healthcare roll-ups, Barrett said. He highlighted certain smaller issuers that have recently recorded a 10.9% default rate, due to a lack of resources to absorb shocks.
‘Extreme’ leverage
The current malaise underlines the need to better distinguish between investment-grade and sub-investment-grade private debt, according to Brad Rogoff, global head of research at Barclays.
Sub-investment grade credit typically involves more “extreme” leverage, often tied to software risk and concentrated in the U.S., he said.
Investment grade, by contrast, tends to include private placement senior tranches, asset-backed mortgages, and similar assets. “There is a different risk profile between the two of them,” Rogoff told CNBC’s “Squawk Box Europe” on Tuesday.
Blackstone.
Private credit funds are also generally less leveraged today than the investment banks that were caught up in the 2008 crash were then, Rogoff noted. “The real difference between this and 2008 is that you had a lot of leverage on similar type assets that had full recourse to whoever owned them,” he said.
Despite the recent noise surrounding the liquidity mismatch between retail investors and semi-liquid vehicles, most private credit capital remains in traditional structures, backed largely by institutional investors with long-term investment horizons.
Nicolas Roth, head of private markets advisory at UBP, said the current wave of redemption requests represents the first real liquidity test for the asset class “at scale.”
He noted how default rates are “elevated, but manageable,” but added that redemption pressure, slowing deal flow, and mark-to-market dispersion are hitting the sector simultaneously.
“The adjustment period will separate strong platforms with structural liquidity buffers from weak platforms relying on subscription momentum to finance exits,” Roth told CNBC via email.
A New Mexico state court jury on Tuesday held Meta liable for nearly $400 million in civil damages after a trial where the state attorney general accused the Facebook and Instagram operator of failing to safeguard kids who use its apps from child predators.
The civil trial, which began with opening arguments in Santa Fe last month, centered on allegations that Meta violated state consumer protections laws and misled residents about the safety of apps like Facebook and Instagram. New Mexico attorney general Raúl Torrez sued Meta in 2023 following an undercover operation involving the creation of a fake social media profile of a 13-year-old girl that he previously told CNBC “was simply inundated with images and targeted solicitations” from child abusers.
Deliberations began Monday, and jurors were tasked with ruling in favor or against the defendant Meta. Jury members found that Meta willfully violated the state’s unfair practices act, and decided the company should pay $375 million in damages based on the number of violations.
Linda Singer, an attorney representing New Mexico, urged jury members during closing statements to impose a civil penalty against Meta that could top $2 billion.
“We respectfully disagree with the verdict and will appeal,” a Meta spokesperson said. “We work hard to keep people safe on our platforms and are clear about the challenges of identifying and removing bad actors or harmful content. We will continue to defend ourselves vigorously, and we remain confident in our record of protecting teens online.”
Meta denied the state of New Mexico’s allegations and previously said that it is “focused on demonstrating our longstanding commitment to supporting young people.”
“The jury’s verdict is a historic victory for every child and family who has paid the price for Meta’s choice to put profits over kids’ safety,” Torrez said in a statement.“Meta executives knew their products harmed children, disregarded warnings from their own employees, and lied to the public about what they knew. Today the jury joined families, educators, and child safety experts in saying enough is enough.”
When the New Mexico trial’s second phase, conducted without a jury, commences on May 4, a judge will determine whether Meta created a public nuisance and should fund public programs intended to address the alleged harms. The state’s lawyers are also urging Meta to implement changes to its apps and operations, including “enacting effective age verification, removing predators from the platform, and protecting minors from encrypted communications that shield bad actors.”
During the trial, New Mexico prosecutors revealed legal filings detailing internal messages from Meta employees discussing how CEO Mark Zuckerberg’s 2019 announcement to make Facebook Messenger end-to-end encrypted by default would impact the ability to disclose to law enforcement some 7.5 million child sexual abuse material reports.
In an interview with CNBC on Tuesday before the verdict was revealed, Torrez discussed Meta’s argument that the prosecutors cherry picked certain materials to paint an unfair picture about the company, and that Meta has been updating its various apps with safety features.
Torrez said he didn’t think that the jury would “be convinced that they’ve done as much as they can or should have, and that they should be held responsible for it.”
“One of the things that I am really focused on is how we can change the design features of these products, at least within New Mexico, and that would create a standard that could then be modeled elsewhere in the country, and, frankly, around the world,” Torrez said during the sidelines of the Common Sense Summit held in San Francisco.
Torrez said that a similar child-exploitation related suit involving Snap, filed by his office in 2024, is still in the discovery stages and that his team was “able to overcome section 230 motions” in both the Meta and Snap case. The tech industry has argued that the Section 230 provision of the Communications Decency Act should prevent them from being held liable for content shared on their respective services, resulting in prosecutors testing new legal strategies focusing on the design of the apps instead.
Regarding Meta’s criticism that prosecutors are picking certain corporate documents and related materials, Torrez said, “What’s interesting is they accuse us of doing that, but all we’re doing is showing the world what they knew behind closed doors and weren’t willing to tell their users.”
The New Mexico case is one of multiple social media-related trials taking place this year that experts have compared to the Big Tobacco suits from the 1990s due in part to allegations that the companies misled the public about the safety and potential harms of their products.
Jury members in a separate, personal injury trial involving Meta and Google’s YouTube have been deliberating in a Los Angeles Superior court since last Friday. The companies are alleged to have misled the public about the safety and design of their respective apps. The jury must determine whether one or both of the companies implemented certain design features that contributed to the mental distress of a plaintiff who alleged that she became addicted to social media apps when she was underage.
A separate federal trial in the Northern District of California will commence later this year. Multiple school districts and parents across the nation allege that that the actions and apps of Meta, YouTube, TikTok and Snap caused negative mental health-related harms to teenagers and children.
WATCH: Would be surprised in Meta workforce cuts are as big as reported, says Evercore’s Mark Mahaney.
Microsoft AI CEO Mustafa Suleyman speaks during an event highlighting Microsoft Copilot, the company’s AI tool, on April 4, 2025 in Redmond, Washington. The company also celebrated its 50th anniversary.
Stephen Brashear | Getty Images News | Getty Images
Microsoft said Tuesday that it’s bringing together the engineering groups for its commercial and consumer Copilot assistants, which have yet to gain broad adoption.
Jacob Andreou, a former Snap executive who works in Microsoft’s artificial intelligence unit, will become an executive vice president in charge of the consumer and commercial Copilot experience, CEO Satya Nadella wrote in a memo to employees.
Andreou will report to Nadella. Executives Ryan Roslansky, Perry Clarke and Charles Lamanna, who will also report to Nadella, will lead Microsoft 365 applications and the Copilot platform, Nadella wrote.
The Copilot moves will free up executive Mustafa Suleyman, a former co-founder of AI lab DeepMind that Google bought in 2014, to focus more on building new models.
“The next phase of this plan is to restructure our organization to enable me to focus all my energy on our Superintelligence efforts and be able to deliver world class models for Microsoft over the next 5 years,” Suleyman wrote in a memo. “These models will enable us to build enterprise tuned lineages that help improve all our products across the company.”
Since arriving at Microsoft through the Inflection deal in 2024, Suleyman has spent time working on Copilot for consumers, among other initiatives.
Microsoft’s Copilot app had 6 million daily active users in February, while OpenAI’s ChatGPT had 440 million and Google’s Gemini had 82 million, according to data from app analytics company Sensor Tower.
Sensor Tower said that so far in March, Anthropic’s Claude, which has gotten extensive media attention because of Anthropic’s standoff with the U.S. Department of Defense, has reached 9 million daily users, while Copilot still stands at 6 million.
Microsoft incorporates generative AI models from Anthropic and OpenAI. About 3% of commercial users with Office productivity software subscriptions have access to the Microsoft 365 Copilot add-on. Google is pushing Gemini to both consumers and corporations.
In November, Microsoft announced the formation of a superintelligence group under Suleyman, who said Tuesday that frontier model development has always been his main focus and passion.
He said he will “stay directly involved in much of the day-to-day operation” of the broad Microsoft AI group that includes products such as the Bing search engine.
Google controlled 90% of search engine market share in February, while Bing had about 5%, according to estimates from web analytics company StatCounter.
“We are doubling down on our superintelligence mission with the talent and compute to build models that have real product impact, in terms of evals, COGS reduction, as well as advancing the frontier when it comes to meeting enterprise needs and achieving the next set of research breakthroughs,” Nadella wrote.
The shake-up comes as pressure mounts on software companies to show a return on AI investments, as investors worry that the models could disrupt software incumbents.
The iShares Expanded Tech-Software Sector Exchange-Traded Fund is down about 19% so far this year, with Microsoft falling 17% in that period.
Microsoft is constructing models for generating source code, images and audio, and for reasoning, which produces answers that people can find more thoughtful but requires more time, Suleyman said.
At the same time, Microsoft will keep drawing on OpenAI intellectual property. In October, Microsoft said it has IP rights for OpenAI models and products through 2032.
“I’m genuinely thrilled about this change precisely because most of the future value is going to accrue to the model layer, and my job is to create highly COGS-optimized, highly efficient enterprise specific model lineages for Microsoft over the next three to five years,” Suleyman said in an interview, using the acronym for cost of goods sold. “That is singularly the objective, precisely because the model is the product, right? That is the future direction of all the IP.”
WATCH: Microsoft shifts from OpenAI exclusivity and expands its AI basket
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In an aerial view, a billboard advertising an artificial intelligence (AI) company is posted on Sept. 16, 2025 in San Francisco, California.
Justin Sullivan | Getty Images
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.
Nebius shares year-to-date
“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.
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Oracle shares rose as much as 10% in extended trading on Tuesday after the software vendor reported quarterly results that surpassed Wall Street projections and boosted its revenue guidance for fiscal 2027.
Oracle sees $1.92 and $1.96 in adjusted earnings per share for the fiscal fourth quarter, with revenue growth between 19% and 20%. LSEG’s consensus included $1.70 per share and 20% revenue growth.
Here’s how the company did in the quarter relative to LSEG consensus:
Earnings per share: $1.79 adjusted vs. $1.70 expected
Revenue: $17.19 billion vs. $16.91 billion expected
Oracle’s overall revenue increased 22% year over year in the fiscal third quarter, which ended on Feb. 28, according to a statement. Net income rose to $3.72 billion, or $1.27 a share, from $2.94 billion, or $1.02 a share, in the same quarter a year earlier. Adjusted earnings per share excludes stock-based compensation expense.
The company reported $8.9 billion in total cloud revenue, including infrastructure and software as a service, or SaaS. The number was up 44% and more than the $8.85 billion consensus among analysts surveyed by StreetAccount.
Management pushed up the company’s fiscal 2027 revenue forecast by $1 billion to $90 billion. Analysts polled by LSEG had anticipated $86.6 billion.
Oracle said it generated $4.9 billion in cloud infrastructure revenue, up 84%, a faster pace than the 68% growth in the prior quarter. The company touted cloud business from Air France-KLM, Lockheed Martin, SoftBank Corp. and Microsoft’s Activision Blizzard video game subsidiary.
Shares of Oracle have plummeted over 50% from their September highs, falling along with other software vendors on broader artificial intelligence concerns as well as Wall Street’s specific fears about the company’s hefty debt load that’s funding its AI buildout.
Thank God we have these coding tools now that allow us to build a comprehensive set of software, agent-based software, to implement, to automate a complete ecosystem like healthcare or financial services,” Larry Ellison, Oracle’s co-founder, technology chief and executive chairman, said on a conference call with analysts. “That’s what we’re doing at Oracle. That’s why we think we’re a disruptor. That’s why we think the SaaS apocalypse applies to others but not to us.”
As of Tuesday’s close, the stock had declined 23% in 2026, while the S&P 500 is down less than 1% in the same period.
Oracle has won large contracts to deliver cloud infrastructure to AI companies such as OpenAI, but has less cash on hand than larger competitors such as Amazon and Microsoft.
Renting out Nvidia graphics chips ekes out a smaller profit margin than selling software licenses, and Oracle reported $13.18 billion in negative free cash flow for the past 12 months.
During the quarter, Oracle announced plans to raise $45 billion to $50 billion in the fiscal year to expand its cloud infrastructure capacity. The company is planning for over 10 gigawatts worth of computing power coming online in the next three years, Clay Magouyrk, its other CEO, said on the call.
The across-the-board beat may help settle a nervous investor base, at least for the time being, as Oracle’s results and backlog point to a continuing surge in demand for AI infrastructure. Remaining performance obligations more than quadrupled to $553 billion from a year earlier — although it was slightly lower than StreetAccount’s $556 billion consensus — and the company said it has the capital to support that growth.
“Most of the increase in RPO in Q3 related to large scale AI contracts where Oracle does not expect to have to raise any incremental funds to support these contracts as most of the equipment needed is either funded upfront via customer prepayments so Oracle can purchase the GPUs, or the customer buys the GPUs and supplies them to Oracle,” the company said in the statement.
In Abilene, Texas, where Oracle and Crusoe are constructing a data center project for OpenAI, “two buildings are completely operational and the rest of the campus is on track,” Oracle said in a Sunday X post. The statement came after Bloomberg reported that Oracle and OpenAI had dropped plans to expand the site, though Oracle said media reports regarding Abilene were incorrect.
At the end of February, Oracle announced a $110 funding round, with backing from Amazon and Nvidia, among others.
“Some of the largest consumers of AI Cloud capacity have recently strengthened their financial positions quite substantially,” Oracle said in its Tuesday statement.
Bloomberg reported last week that Oracle was planning layoffs.
“AI models for generating computer code have become so efficient that we have been restructuring our product development teams into smaller, more agile and productive groups,” Oracle said in the statement. “This new AI Code Generation technology is enabling us to build more software in less time with fewer people. Oracle is now building more SaaS applications for more industries at a lower cost.”
Salesforce CEO Marc Benioff during the World Economic Forum in Davos, Switzerland, Jan. 20, 2026.
Krisztian Bocsi | Bloomberg | Getty Images
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.
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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%.
Salesforce, Docusign and Thomson Reuters one-day stock chart.
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.
