Oracle Stock’s Brutal Week Crashes Harder on Friday - Here’s What Triggered the Plunge

Oracle's rough week just turned into a full-blown rout.

The enterprise software giant saw its stock take another punishing hit on Friday, extending a brutal stretch that's left investors scrambling. This wasn't just a bad day—it was the exclamation point on a dismal period.

Earnings Fall Short, Guidance Disappoints

The core of the sell-off traces back to Oracle's latest quarterly report. Revenue and earnings per share both missed Wall Street's targets, a rare stumble for the legacy tech titan. The numbers simply didn't add up to the growth story management had been selling.

Cloud Growth Fails to Impress

All eyes were on Oracle's cloud segment, the division tasked with carrying the company into the future. While growth was reported, the pace failed to meet the sky-high expectations baked into the stock's valuation. In the hyperscale race against AWS, Azure, and Google Cloud, 'good enough' isn't good enough for the market.

Broader Tech Sell-Off Adds Pressure

Friday's slide was amplified by a sector-wide retreat in tech stocks. Rising bond yields and macroeconomic jitters sent investors fleeing from high-valuation names. Oracle, caught in the downdraft, had no specific news to counter the negative momentum—it was simply in the wrong place at the wrong time.

The week's damage underscores a harsh reality: in today's market, missing estimates is punished, but missing them while your core growth engine sputters? That gets you a one-way ticket to the penalty box. It's a classic case of a legacy giant learning that past success is no guarantee of future performance—a lesson Wall Street teaches with brutal efficiency.

Key Takeaways

• Oracle shares dropped Friday following reports it had delayed delivery of some data centers for OpenAI.
• The stock ended the week nearly 13% lower after Oracle's quarterly results on Wednesday fell short of expectations and amplified scrutiny of its AI investments.

A bad week for software Maker Oracle (ORCL) ended on a sour note. 

Bloomberg, citing people familiar with the matter, reported that Oracle had delayed by a year the delivery of some data centers it's developing for ChatGPT maker OpenAI. The delays were caused by material and labor shortages, according to Bloomberg.

The report weighed on Oracle's shares, already under pressure following the release of its results earlier in the week, pulling them another 4.5% lower Friday to levels not seen since June.

The company in a statement said "all milestones remain on track."

Why This Is Important

Oracle is borrowing heavily in its bid to compete with cloud computing giants like Microsoft and Alphabet. That has made investors wary of the software giant's data center investments.

“There have been no delays to any sites required to meet our contractual commitments,” an Oracle spokesperson told Investopedia. “We remain fully aligned with OpenAI and confident in our ability to execute against both our contractual commitments and future expansion plans.”

Friday’s losses extended Oracle stock’s Thursday drop, when shares tumbled more than 10% after the company’s quarterly earnings fell short of expectations and revived concerns about its AI ambitions. Oracle stock lost nearly 13% of its value this week. 

Related Education

Oracle is aggressively investing in AI infrastructure to compete with cloud computing incumbents Microsoft (MSFT), Alphabet (GOOG), and Amazon (AMZN). However, unlike its largest competitors, whose profits are paying for their data center projects, Oracle is borrowing heavily. Some investors are concerned the company will struggle to repay its debt if AI demand falls short of expectations. 

Oracle’s business with OpenAI has added to investor concerns. OpenAI accounts for $300 billion, or more than half, of Oracle’s cloud computing backlog, but the start-up isn’t expected to turn a profit until the end of the decade.

Whether Oracle realizes all of its future revenue from OpenAI will depend to some extent on the latter’s ability to raise money from investors or lenders.