Oracle Stock Tumbles: Here’s Why the Tech Giant Hit a Rough Patch

Oracle shares take a nosedive as investors flee traditional tech plays.

Cloud Growth Concerns

Wall Street punishes legacy infrastructure providers clinging to outdated models. The migration to decentralized systems accelerates—Oracle's centralized database empire faces existential threats from blockchain-based alternatives.

Earnings Miss Fallout

Another quarter of disappointing guidance sparks sell-off frenzy. Institutional investors rotate capital into Web3 infrastructure plays while traditional enterprise software vendors bleed valuation.

The Oracle Paradox

Why pay premium prices for yesterday's technology? Smart money already pivots to decentralized oracle networks like Chainlink—the irony isn't lost on crypto natives watching boomer tech stocks crumble.

Another reminder that betting against technological disruption rarely ends well for legacy players. But hey—at least their dividend yield looks attractive while the ship sinks.

Image source: Getty Images.

Oracle's paying for TikTok, but what will it get?

It's been about a week since rumors began floating that the deal to sell TikTok's U.S. operations to a consortium of American companies is accelerating -- rumors that named Oracle as a prominent player. Today, multiple news outlets report further details on how the deal might proceed.

For example, AP says private equity shop Silver Lake Partners, alongside billionaires Rupert Murdoch and Michael Dell may join Oracle in investing in "TikTok U.S." -- 20% of which will remain owned by China's ByteDance. More interesting than who's buying, though, is what they're getting for their money.

Specifically, Oracle et al. may not be allowed to "buy" TikTok, but only license a copy of the algorithm, and perhaps exercise some control over what kinds of data get fed into it (as well as control the data it generates).

Is Oracle stock still a buy?

I suspect this is the detail that's giving investors pause today.

While keeping U.S. data in domestic hands is certainly an improvement, if all ByteDance does is lease Oracle a black box version of its algorithm, with no insight into or ability to change the code within, that seems less helpful -- and less valuable to Oracle. Absent an outright sale, Oracle should insist on at least a full source code license giving it full access to the TikTok algorithm's underlying codebase.

Anything less than that, and Oracle stock is probably not worth its present 75 times earnings valuation.