Oracle Stock Rises Premarket as Company Plans Job Cuts to Fund AI Data Center Expansion

Oracle shares rose in premarket trading after reports that the company plans to cut thousands of jobs as part of a broader strategy to free up cash for artificial intelligence data center investments.

The software and cloud computing company has reportedly begun informing employees about a new round of layoffs that could affect thousands of workers across its global workforce of approximately 162,000 employees. The company declined to comment publicly on the reports.

Oracle’s stock was up around 2.6% in early trading following the news. The move comes as investors continue to closely monitor the company’s heavy spending on AI infrastructure, which has raised concerns about capital expenditure and short-term profitability. Although Oracle’s shares rose nearly 6% earlier this week, the stock remains down roughly 25% so far this year.

Earlier this year, Oracle announced plans to raise up to $50 billion through a combination of debt and equity in 2025 to expand its cloud and AI data center capacity. The expansion is intended to support growing demand from major AI and cloud customers, including Nvidia, Meta, OpenAI, Advanced Micro Devices, and xAI.

Oracle is not alone in increasing spending on AI infrastructure. Major technology companies including Alphabet, Microsoft, Meta, and Amazon are collectively expected to spend close to $700 billion on AI infrastructure and data center expansion this year. These large capital expenditures have made investors cautious, as the spending reduces free cash flow without clear short-term returns.

Analysts at Barclays said the planned job cuts could help Oracle improve cash flow and manage costs while continuing to invest heavily in AI infrastructure. The bank maintained a positive rating on the stock, noting that the layoffs were not unexpected and are part of Oracle’s broader restructuring plan.

Barclays analysts also noted that Oracle currently generates less profit per employee compared to some of its competitors, suggesting that workforce restructuring could improve operational efficiency. The analysts expect Oracle’s revenue to grow significantly over the next few years, driven by AI infrastructure demand, while operating costs remain controlled due to limited headcount growth.

The layoffs highlight a broader trend across the technology industry, where companies are reducing workforce costs in some areas while simultaneously investing heavily in artificial intelligence infrastructure, cloud computing, and data center capacity.