Why Oracle (ORCL) Stock Is Down Today

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What Happened?

Shares of enterprise software giant Oracle (NYSE: ORCL) fell 7.1% in the morning session after the stock pulled back, as investors locked in some gains in reaction to the company's detailed long-term guidance, suggesting optimism might be cooling off. 

Fueling the initial optimism, management confirmed that remaining Performance Obligations (RPO) had exceeded $500 billion and eased concerns related to margin contraction, noting that an AI infrastructure contract valued at $60 billion over six years would have a 30 - 40% margin. 

However, the rally stalled when Executive VP Douglas A. Kehring presented the full financial outlook. He projected a 16% total revenue growth rate for fiscal year '26, which, while Oracle’s fastest organic growth in over 15 years, did not satisfy some investors hoping for a more immediate acceleration. CEO Clayton Magouyrk clarified that the primary challenge is not demand, but the operational execution of massive deals, as the high-growth AI infrastructure business remained supply constrained. 

Ultimately, investors engaged in profit-taking, recognizing that translating transformative demand into higher revenue growth will be a prolonged process, gated by the real-world pace of data center deployment.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Oracle? Access our full analysis report here.

What Is The Market Telling Us

Oracle’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 4 days ago when the stock gained 5.4% on the news that the company announced a strategic partnership with Zoom Communications to enhance its cloud offerings. 

The agreement involved running Zoom's customer experience platform on Oracle Cloud Infrastructure, a move designed to help organizations improve customer service. Adding to the positive developments, Oracle also entered a partnership with Duality for encrypted data collaboration. The company's focus on artificial intelligence infrastructure was further highlighted by the news that it would use Nvidia's advanced Ethernet switches in its AI factories to speed up its data center networks, supporting the strong demand for its AI services. 

Contributing to the positive momentum, the major indices rebounded as signs of easing trade tensions between the U.S. and China emerged over the weekend. The tech-focused Nasdaq Composite jumped around 1.7%, while the S&P 500 gained 1.2%. This rebound followed a significant sell-off the previous trading day, which saw the Nasdaq plummet 3.6% and the S&P 500 sink 2.7% after threats of new tariffs heightened fears of a trade war. Investor sentiment improved after the U.S. President adopted a more conciliatory tone toward Beijing in a social media post. The shift in language helped calm market jitters and spurred a broad-based rally as investors welcomed the potential de-escalation of the trade dispute.

Oracle is up 75.8% since the beginning of the year, but at $291.92 per share, it is still trading 11.1% below its 52-week high of $328.33 from September 2025. Investors who bought $1,000 worth of Oracle’s shares 5 years ago would now be looking at an investment worth $4,896.

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