Shares of cloud computing giant Oracle plunged more than 10% in after-hours trading on Wednesday after the company’s revenues fell short of Wall Street expectations.

The company reported revenue of $16.06bn (£11.99bn) for the three months that ended in November, compared with the $16.21bn projected by analysts.

Revenue growth was up 14%, with a 68% surge in sales at its AI business, Oracle Cloud Infrastructure (OCI), the company said.

OCI services major AI technology developers whose demand for Oracle’s AI infrastructure helped the company’s shares reach new highs this fall but Wednesday’s results failed to quell fears about a potential AI bubble.

In September, Oracle agreed a highly sought-after contract with ChatGPT-maker OpenAI, which agreed to purchase $300bn in computing power from Oracle over five years.

Oracle chairman and chief technology officer Larry Ellison briefly became the world’s richest man in after the announcement.

But the firm’s shares have lost 40% of their value since peaking three months ago. Still, they are up by more than a third since the start of the year.

In a statement issued on Wednesday, Mr Ellison struck a cautious tone.

“There are going to be a lot of changes in AI technology over the next few years and we must remain agile in response to those changes,” he wrote.

Mr Ellison also appeared to snub Nvidia, the designer of highly-sophisticated AI chips, saying Oracle would buy chips from any maker in order to serve clients.

“We will continue to buy the latest GPUs from Nvidia, but we need to be prepared and able to deploy whatever chips our customers want to buy,” Mr Ellison declared in a policy he called “chip neutrality”.

Oracle is involved in multiple AI infrastructure arrangements that have raised the prospect that major players in the sector are participating in ‘circular financing’ deals whereby companies finance purchases of their own products and services.

“Oracle’s earnings arrive as investors weigh whether its massive OpenAI partnership might mean overexposure with a customer currently in the spotlight over profitability concerns,” said Emarketer analyst Jacob Bourne following the release of the company’s quarterly report.

Mr Bourne said Oracle faced mounting scrutiny over the increased debt the company has amassed to fund building data centres.

But others said Wall Street’s negative reaction was unfounded.

“This was nothing but a great quarter for Oracle,” said Cory Johnson, Chief Market Strategist at Epistrophy Capital Research. “Revenue growth of 14% is accelerating.”

Including the OpenAI deal from September, Mr Johnson noted, Oracle has signed $385bn in contracts over six months, and “those new clients are the likes of Meta and Nvidia.”

“But AI sentiment is so bad right now, that’s seen as a bad thing for Oracle,” he added.

Oracle raised a record $18bn in a massive bond sale in September, one of the largest debt issuances ever in the tech sector.

“Although Oracle’s shares are buoyed by its September surge, this revenue miss will likely exacerbate concerns among already cautious investors about its OpenAI deal and its aggressive AI spending,” Mr Bourne said.

The Ellison family, supporters of US President Donald Trump, also recently purchased Paramount and have spearheaded a bid to take over another major Hollywood studio, Warner Brothers Discovery.

Washington: The US Federal Reserve opened its final chapter of 2025 with a small but meaningful step, trimming its benchmark interest rate by 25 basis points even as the country digests delayed economic data from the recent government shutdown. With this move, which was announced after a closely watched meeting in Washington, the federal funds rate now stands in the range of 3.5 to 3.75 per cent, its lowest level since late 2022, according to a report by CBS News.

This reduction becomes the third straight cut since September, adding up to a total easing of 0.75 percentage points for the year. The central bank has been handling a difficult moment in the US economy, where job creation is cooling noticeably while inflation remains stubborn in key pockets.

Even without the full set of timely numbers, Fed officials kept a close eye on private-sector indicators, including an Automatic Data Processing (ADP) report that showed a loss of 32,000 jobs in November, a sign that pressure on the labour market has intensified.

In its statement, the Federal Open Market Committee said it would keep evaluating “incoming data, the evolving outlook and the balance of risks” before deciding on any further adjustments. The message reflected the Fed’s attempt to stay measured as it heads into a leadership transition next year.

New quarterly projections shared by the Fed show officials expect only one rate cut in 2026, offering a hint of the caution inside the boardroom. Updated forecasts also paint a clearer picture of where the central bank believes the economy is heading. The Fed expects its preferred inflation gauge, the Personal Consumption Expenditures index, to ease to 2.4 per cent next year, a step down from the 2.9 per cent median estimate for 2025.

Economic growth, meanwhile, is projected to reach 2.3 per cent in 2026, with unemployment holding consistently at 4.4 per cent.

Economists outside the central bank read the signals in a similar way. Ryan Sweet, chief global economist at Oxford Economics, told investors that the Fed’s latest guidance points to what he described as an “extended pause” in the rate-cut cycle.

“The Fed is not going to be able to help the labour market because of what ails it,” he said, adding that monetary policy alone cannot address the structural issues weighing on hiring.

The latest cut brings the benchmark rate back to levels last seen in early November 2022, a period when the Fed was still tightening aggressively to respond to runaway inflation in the aftermath of the pandemic.

Lower rates typically encourage borrowing, which in turn supports hiring and consumer spending, but the central bank appears determined to proceed carefully.

The decision itself exposed a rare division inside the Federal Open Market Committee (FOMC). While Jerome Powell and eight members backed the 0.25-percentage-point cut, three policymakers disagreed. This is the highest level of dissent in six years.

Austan Goolsbee and Jeffrey Schmid argued for keeping rates unchanged, while Stephen Miran pushed for a 0.5-percentage-point reduction.

These debates come at a moment for the institution. Powell’s term as Fed chair ends in May 2026, and US President Donald Trump is preparing to select his successor. In a note shared with clients and cited by CBS News, Jeff Schulze of ClearBridge Investments said that “the outlook from the Powell-led FOMC bears less than usual on future Fed policy decisions given the imminent change in leadership”. It captures the sense of transition that now hangs over the central bank.