Oracle Shares Take a Hit on Profit Margins Report

Oracle shares tumbled after a report that the software maker’s profit margin in its cloud computing business is lower than many on Wall Street have been estimating.

While Oracle generated roughly $900 million in revenue from the rental of servers powered by Nvidia chips during the three months ended in August, the company only managed about $125 million in gross profit, The Information reported, citing internal corporate documents. Oracle shares fell as much as 7.1% on Tuesday before paring much of the decline, while Nvidia dipped as much as 0.6%.