Oracle Denies Data Center Delay Report After Shares Slide On OpenAI Build-Out Concerns

• Bloomberg reported on Friday, citing unnamed people familiar with the matter, that the company is postponing completion dates of the data centers to 2028 from 2027.
• However, an Oracle spokesperson told Reuters that there have been no delays to any sites.  
• Oracle CEO Clay Magouyrk stated during the company’s second-quarter (Q2) earnings call that work at its supercluster in Abilene, Texas, which it is developing for OpenAI, is on track.

Oracle on Friday denied a media report that it was pushing back on the completion dates for some of the data centers it is developing for Open AI.

Bloomberg reported on Friday, citing unnamed people familiar with the matter, that the company is postponing completion dates of the data centers to 2028 from 2027 owing to labor and material shortages. Shares of the company fell as much as 6% in mid-day trade before paring back some of the losses. Other AI-related shares also tumbled, including Nvidia, CoreWeave, and Broadcom.

However, Oracle spokesperson Michael Egbert told Reuters that there have been no delays.

“Site selection and delivery timelines were established in close coordination with OpenAI following execution of the agreement and were jointly agreed. There have been no delays to any sites required to meet our contractual commitments, and all milestones remain on track,” Egbert told Reuters. “We remain fully aligned with OpenAI and confident in our ability to execute against both our contractual commitments and future expansion plans.”

Oracle and OpenAI struck a $300 billion contract in September, with the former agreeing to build out data centers with a total capacity of 4.5 gigawatts.

Analyst Take

RBC Capital reiterated a ‘Sector Perform’ rating and $250 price target on Oracle following the news. RBC said that it confirmed the lack of delay with company management.

According to RBC, the company management noted it remains fully aligned with OpenAI and confident in its ability to execute against both its contractual commitments and future expansion plans.

Disappointing Earnings

On Thursday, analysts cut their price targets on ORCL stock following the company’s mixed Q2 performance.

While Oracle’s cloud infrastructure revenue grew 68% year-on-year to $4.1 billion, its capital expenditure rose to $12 billion, $4 billion higher than analyst estimates.

Oracle CEO Clay Magouyrk stated during the company’s second-quarter (Q2) earnings call that work at its supercluster in Abilene, Texas, which it is developing for OpenAI, is on track. Magouyrk revealed that Oracle had already delivered 96,000 Nvidia Corp. (NVDA) Grace Blackwell GB200 chips at the facility.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around ORCL stated within the ‘extremely bullish’ territory whale message volume stayed at ‘extremely high’ levels.

ORCL stock has gained 14% this year and by about 8% over the past 12 months. 

Also See: Google Says You Can Now Hear Real-Time Translations In Your Headphones With The Help Of Gemini

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