Oracle Drops 24% in 2026 as AI Spending Fears Mount
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Oracle shares have dropped over 24% in 2026, fueled by investor concerns about the company's plan to raise up to $50 billion in debt and equity to fund its AI infrastructure build-out.
- Oracle's remaining performance obligations hit $553 billion in Q3 FY2026, up 325% year-over-year, with management saying capacity is being built to meet already-contracted AI demand rather than speculatively.
- Oracle's Q3 FY2026 revenue rose 22% year-over-year to $17.2 billion, with cloud revenue jumping 44% to $8.9 billion and the multi-cloud database segment soaring 531% year-over-year.
- Oracle signed a five-year, $300 billion compute deal with OpenAI in September 2025 and participates in the Stargate initiative, a project valued at up to $500 billion targeting roughly 10 gigawatts of data center capacity.
- Oracle is cutting thousands of jobs to redirect resources toward AI and cloud, with AI infrastructure margins already above 30% and database services at 60%–80% gross margins.
- Despite the selloff, Oracle trades at 18.3 times forward earnings, which the source frames as a potentially attractive entry point if the company delivers on its backlog.
Why it matters: Oracle's $553 billion backlog has more than quadrupled year-over-year, yet the stock is being punished for the $50 billion spending required to fulfill it. The 24% drop creates a clear disconnect: the AI build-out spooking the market is precisely why contracted revenue surged 325% YoY.
Ask SkimNews
