Today’s Change
Current Price
Oracle (ORCL -3.47%), an enterprise cloud software and AI infrastructure provider, closed at $139.53, down 3.48%. Oracle fell after reports said it sent a force majeure notice tied to its New Mexico Project Jupiter data center, while investors await December earnings. Trading volume reached 56.2M shares, coming in about 68% above its three-month average of 33.4M shares.
How the markets moved today
S&P 500 (^GSPC -0.02%) closed at 7,704, down 0.03%, while Nasdaq Composite (^IXIC +0.01%) closed at 26,939, up 0.01%. Among enterprise application software, database software, and cloud infrastructure peers, Salesforce (CRM +0.27%) closed at $238.40, up 0.35%, while ServiceNow (NOW -2.13%) closed at $137.81, down 2.11%, showing mixed trading across the group.
What this means for investors
Oracle stock dropped 3.5% today after the company sent a force majeure notice to Stack Infrastructure, the developer of a massive data center overlay (Project Jupiter) in New Mexico. With ORCL stock already leaning heavily upon debt to fund its AI ambitions, the company’s credit default swaps hit a record high as the market took today’s news as a worrying signal.
While it is mostly a legal maneuver to avoid paying up front for an idle data center — rather than a sign of something having gone catastrophically wrong already — it nonetheless reinforces the numerous headwinds facing data center construction, whether it’s local regulations, NIMBY-ism, power generation, or a wide array of bureaucratic steps to take.
Overall, this isn’t something for ORCL investors to panic over today, but it most certainly is something to watch, especially as the market starts to hold up a magnifying glass to stocks’ ROI from AI capex.
Josh Kohn-Lindquist has positions in ServiceNow. The Motley Fool has positions in and recommends Oracle, Salesforce, and ServiceNow. The Motley Fool has a disclosure policy.
