Oracle Stock Plummeted by 25% in the First Half of 2026, and This Dire AI Warning Might Be Why
Yahoo Finance ·
Oracle ( ORCL 1.56% ) was founded as a software company in 1977, before transitioning first to cloud computing and later to artificial intelligence (AI) infrastructure. It operates some of the fastest and most cost-efficient AI data centers in the world, and its order backlog suggests demand is through the roof. Nevertheless, Oracle stock plummeted by 25% during the first half of 2026, and it's down by more than 50% from last year's record high. Wall Street is concerned that some of Oracle's largest AI customers won't be able to fulfill their obligations, which would be catastrophic because the company has taken on an enormous amount of debt to build more data centers. Those concerns reached a crescendo on June 10, when Oracle released its annual report for fiscal 2026 (ended May 31). It contained some unusual and very thorough warnings about the risks facing its AI infrastructure business, and here's why I think they give investors enough reason to avoid its stock. AI training and inference workloads require a lot of computing capacity, which is typically delivered by thousands of specialized data center chips called graphics processing units (GPUs) . Oracle buys these chips from some of the world's top suppliers, like Nvidia and Advanced Micro Devices , installs them in its infrastructure, and rents the computing capacity to other businesses.
DYAX Investor Sentiment
Bullish (Long) 58% · Bearish (Short) 42%
385 participants
Related News
- INTC, WDC, SNDK, AMD: Red-Hot AI Chip Stocks Lose Sheen In Samsung-Triggered Selloff
- Why Eli Lilly Stock Climbed to a Record High Today
- Lazada Joins Meta's Affiliate Partnerships Programme to Streamline Social Shopping in Southeast Asia
- McCormick Is Shifting From the Spice Rack to the Refrigerator With This $45 Billion Deal
- SpaceX Trading Frenzy Sends Tokenized Equity Volume to Record $3.86B
- South32 secures U.S. Forest Service approval for Arizona mine