Oracle (ORCL) will report its third quarter earnings after the bell on Tuesday, amid reports that the company has axed plans to expand an AI data center with OpenAI (OPAI.PVT) and that it’s preparing to cut thousands of jobs.
The AI infrastructure company is spending tons of cash on data centers, but investors aren’t quite sold on the idea.
Oracle stock has fallen steeply. After climbing to a high of $345.72 in September, the stock was trading at $154 as of Tuesday. Shares are now off 37% over the last six months and 23% since the start of the year.
Oracle stock rose 2% before the bell on Tuesday.
Oracle’s capital expenditures have ballooned tremendously over the last year, jumping as much as 269% in the first quarter to $8.5 billion, and the company is expected to report a further 139% increase to $14 billion in Q3, according to Bloomberg analyst consensus estimates.
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For the quarter, Oracle is expected to see earnings per share (EPS) of $1.70 on revenue of $16.9 billion, up from the $1.47 and $14.1 billion the company reported in the same period last year.
Oracle’s cloud segment is expected to bring in revenue of $8.8 billion, while its software segment is expected to generate $5.9 billion.
Remaining performance obligations, or contracts that the company has signed, but needs to complete before it receives payments, are estimated to top $470.7 billion, a dramatic increase from the $130 billion the company had in Q3 2025.
The earnings announcement comes after Bloomberg reported that Oracle and OpenAI have canned a planned expansion of their Stargate data center project in Texas, which gave Meta (META) the opportunity to begin talks with developer Crusoe to lease the location.
But Oracle pushed back on the report in a post on X.
“Recent media activity about the Abilene site are false and incorrect,” the company said.
“First, Crusoe and Oracle are operating in lockstep to deliver one of the world’s largest AI Data centers in Abilene at record-breaking pace. Two buildings are completely operational and the rest of the campus is on track. Second, Oracle has completed leasing for the additional 4.5GW to deliver on our commitments to OpenAI.”
It also follows a separate Bloomberg report that Oracle plans to lay off “thousands” of workers. The move is seen as a way to help Oracle finance its massive data center build-out.
Oracle isn’t the only company spending billions of dollars putting up data centers around the world.
Amazon (AMZN), Google (GOOG, GOOGL), Meta, and Microsoft (MSFT) plan to allocate a collective $650 billion in 2026 to capital expenditures, with much of that going to data centers for AI apps and models.