How Oracle's AI Rally Crumbled: From Peak Euphoria to 50% Decline

LidoStakeAddict · 2026-01-12T13:35:52+00:00

Oracle's stock surged in September but plummeted nearly 50% as reality set in. High capital expenditures and delays in infrastructure projects raised concerns, leading to a market reassessment of the tech giant’s growth narrative and valuation.

LidoStakeAddict

2026-01-12 13:35:52

Abstract generation in progress

Oracle’s (ORCL.N) meteoric rise in September proved to be a mirage. The stock once climbed to $345, fueling Ellison’s brief ascent to world’s richest person status, grounded in a compelling narrative: Oracle as the backbone of AI infrastructure. This positioning ignited investor passion around Remaining Performance Obligations (RPO), positioning it as the ultimate growth metric. Yet reality has delivered a brutal correction, with shares now trading near $177—a staggering descent representing nearly half its peak valuation.

The Cracks in the AI Infrastructure Story

Two developments systematically dismantled the bullish case. First came the capital expenditure reality check. Oracle’s Q2 guidance revealed a startling $50 billion capital expenditure commitment for fiscal 2026, forcing investors to confront an uncomfortable truth: constructing expansive data centers financed through massive debt accumulation carries genuine financial risk. The free-lunch narrative evaporated instantly.

Equally damaging was the data center timeline slip. Reports emerged that Oracle’s infrastructure project for OpenAI faced potential delays extending into 2028. Since the entire investment thesis hinged on execution speed and competitive advantage through rapid deployment, postponed delivery gutted the fundamental premise. Without speed as a differentiator, the premium valuation lost its foundation.

The Market’s Reckoning

Today’s additional 5% decline underscores ongoing reassessment. This isn’t merely volatility—it reflects a wholesale recalibration of expectations. When AI enthusiasm collides with debt concerns and execution uncertainty, even heavyweight tech names face severe repricing. Oracle’s high fade from September serves as a stark reminder that infrastructure narratives, however compelling, remain hostage to capital efficiency and reliable delivery.

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.