Oracle's Stock Halved: The High Cost of Chasing AI Infrastructure Supremacy
28.06.2026 - 03:33:20 | boerse-global.de
Oracle has plunged more than 53% from its peak, closing at €130.50 on Friday after a brutal 19% weekly rout. The sell-off isn't your garden-variety correction — it signals a fundamental repricing of the company's costly AI infrastructure gamble. What began as a speculative chase for cloud dominance is now producing a balance-sheet shock that has investors running for the exits.
The numbers tell the story of a business in transition. Oracle poured $55.7 billion into capital expenditures in fiscal 2026, a 162% surge from the prior year, as it rushed to scale its Oracle Cloud Infrastructure platform. That spending spree, largely driven by a blockbuster partnership with OpenAI, left the company with a free cash flow deficit of $23.7 billion. The contrast is stark: on one hand, a contract backlog that has swelled to $638 billion — with OpenAI alone accounting for half that total — and on the other, a growing mountain of debt now estimated at $156 billion against cash reserves of roughly $31 billion.
The financing strain is intensifying. Management is already planning to raise an additional $40 billion through debt and equity, underscoring the gap between its ambitious build-out and its cash-generation capacity. The cloud infrastructure unit posted a 77% revenue jump, but the profit engine is sputtering. Margins in the cloud and software segment slipped from 63% to 59%, as the cost of maintaining specialized AI hardware eats into what was once a high-margin software business.
Should investors sell immediately? Or is it worth buying Oracle?
Oracle has responded with deep cuts to its workforce. Last year, the company eliminated 21,000 positions — a 13% reduction that brings headcount to 141,000. The restructuring, which carried a $1.8 billion price tag, reflects a deliberate shift: labor expenses are being sacrificed to fund energy-hungry data centers. The message from the C-suite is clear — Oracle is no longer just a software vendor; it's a capital-intensive operator of a global network of compute facilities.
Chart watchers note that the stock is deeply oversold. The relative strength index sits near 30, a level that often triggers short-term bounces. But the longer-term picture is bleak: the shares are trading roughly 24% below their 200-day moving average, and repairing that technical damage could take months.
Income investors can hold out for a quarterly dividend of $0.50 per share due in July 2026. Yet the real catalyst for the stock remains the same: Oracle must prove that its giant OpenAI contract can generate positive cash flow before the next capital raise. If the timeline slips, the pressure on the balance sheet — and the shares — will only intensify. For now, the market sees a company that has traded its dependable margins for an expensive, low-margin arms race — and is demanding proof that the strategy will pay off.
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