Oracle shares on pace for worst quarter since 2001 as new CEOs face concerns about AI build-out

December 26, 2025

TL;DR

Oracle shares have dropped 30% this quarter, facing their sharpest decline since 2001.
Investors are skeptical about Oracle's ability to fulfill its $300 billion deal with OpenAI.
Oracle reported weaker-than-expected quarterly revenue and free cash flow.
The company plans significant capital expenditures and leases to boost cloud capacity.
Oracle has raised substantial debt, with concerns about maintaining its investment-grade rating.
The OpenAI deal initially caused Oracle's stock to surge significantly.
Some investors, like Zachary Lountzis, believe the stock's drop is a healthy correction and trust founder Larry Ellison's vision.
Oracle aims for substantial revenue growth by 2030, largely from AI infrastructure.
This growth may come at the expense of profitability, potentially lowering gross margins.
Oracle faces challenges in gaining market share in cloud infrastructure against major competitors.
The success of Oracle's AI build-out and its ability to attract more customers like Databricks and Snowflake are crucial for market perception.

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