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Oracle's lackluster latest earnings have slashed over $70 billion from the market capitalization of the software and data company co-founded by billionaire Larry Ellison, adding to mounting fears of a speculative bubble in AI-related stocks.

Significant Share Price Drop Follows Revenue Miss

Stock in the firm tumbled by over 11 percent in after-hours trading after it disclosed a disappointing fourteen percent rise in sales to $16bn in the latest quarter, as it simultaneously disclosed plans to increase its AI spending by around $15bn.

The enterprise posted disappointing quarterly revenues for the quarter ending in November, with sales at its core cloud computing division growing at a more modest rate than projected, at 34 percent.

Investor Concerns Over Investment and Leverage

Markets were further let down by a slower than expected sixty-eight percent growth in revenues from its infrastructure business.

At the same time, investors were alarmed by the company's increased forecasts for AI investment. It now anticipates capital expenditure to jump by 40 percent to $fifty billion dollars, with the vast majority of the increase aimed at expanding server farms.

This heavy spending plan comes amid a growing leverage, with Oracle's long-term debt having increased by 25% over the past year to reach $99.9bn.

"Frankly, the report was not dramatically bad, but it served to reinforce fears around substantial AI spending, financed by debt, with an unknown timeframe for returns," noted a senior analyst.

Broader Market Repercussions and Ecosystem Risks

Continued excitement about the capabilities of AI tech has driven a leap in company valuations in recent months, but there has been a increasing chorus of cautions from regulators and business leaders who argue equity prices could correct sharply if the market become let down by the development or commercial uptake of AI technology.

While Oracle has become an important tech player developing enterprise solutions for large corporations worldwide and has more recently found strength in the cloud sector, there are increasing concerns about how reliant tech giants are growing on circular funding within the artificial intelligence industry.

Oracle reported that its metric of remaining performance obligations rose by 440 percent over the past year. However, market watchers were wary when it was revealed that these contracts were propelled by large deals from other tech giants like Meta and Amazon.

"While these are high-quality customers, it will not placate fears that the tech sector's AI investments are interdependent, which makes the sector susceptible to a loss of investor confidence," commented a market strategist.

"Overall, strong backlog increase was not enough to alleviate anxiety about AI and the massive amount of investment spending needed by firms to develop AI infrastructure."

Broader Sell-Off in AI-Related Shares

Additional technology stocks subsequently fell in extended trading following the Oracle results. Key movers included:

• Nvidia: Stock fell by 1.3%.
• Alphabet (Google): Shares dropped by 0.3 percent.
• SoftBank: In Japan, the AI investor shares plunged by 7.7% on Thursday.