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Oracle Stock Plummets 30% amid Doubts over AI Growth Strategy

Oracle

Business Honor
27 December, 2025

Recent delays and rising debt raise concerns about Oracle's ambitious AI investment plans and financial outlook.

This quarter saw Oracle Corporation’s shares tumble roughly 30%, representing the largest drop for Oracle since 2001 (when the dot-com bubble burst). The drop began after September when Oracle announced various exciting data center initiatives related to OpenAI’s Stargate project that resulted in an increase in stock price. All-time highs of Oracle’s stock were seen only days before. Now, however, optimism regarding Oracle’s Artificial Intelligence strategy stands at a virtual standstill. Oracle’s plans called for building three new data centers and contributing towards their stated goal of approximately seven gigawatt of total capacity, as well as $400 billion worth of investments over the upcoming three years.

These initiatives were first presented as an important aspect of Oracle's future development, but as reported by CNBC, projects have been delayed due to lack of labour and supplies, and this has raised concerns with investors. Adding to the concern, Oracle's newest earnings report released in late November showed lower-than-expected revenues with a notable increase in capital expenditure. Doug Kehring, the CFO of Oracle, said that he expected Oracle to spend $50 billion on capital asset purchases for fiscal 2026, almost double what Oracle spent in the previous year. Oracle raised $18 billion through a bond sale to help finance these capital projects in September, thus increasing its overall debt level. Even with these challenges, Oracle still plans to reach $225 billion in revenues by the year ending fiscal 2030, compared to the projected revenue of $57 billion for fiscal 2025.

The success of Oracle's AI investment will determine how well the Company grows. However, as Oracle contends with delays in its AI infrastructure setup and mounting debt, many investors are beginning to lose faith in Oracle's ability to achieve its aggressive projections. Additionally, the software segment is feeling additional stress as Oracle reported a $5.88 billion decline in its third-quarter core software revenue, down 3% from a year earlier. Wall Street's skepticism towards Oracle's investment in transformative AI technology now means that the Company's long-term strategy could be in jeopardy as it navigates through this turbulent period. It will be critical for Oracle to identify and resolve the causes of its current setbacks so that it can determine whether it has made the right investment decision, and the impact on Oracle stock will be significant.