Oracle Stock Plunges After AI Spending Shock on December 11, 2025 — What to Know Before the December 12 Market Open

Oracle Corporation (NYSE: ORCL) just delivered one of the most closely watched earnings moments of the AI cycle. The stock has been hit hard, AI peers have wobbled, and Friday’s open now matters for the broader tech trade as much as for Oracle itself.

Oracle stock after the bell on December 11, 2025

By Thursday’s closing bell on December 11, 2025, Oracle stock had gone through a full‑blown repricing:

Close: about $199 per share (roughly $198.9)
Previous close:$223.0 on December 10
One‑day move:–10.8%, after being down as much as about 16.5% intraday
Day’s range: roughly $186–$202
Volume: around 96 million shares, roughly 4× its recent average daily volume. ^[1]

The selloff wiped out more than $90 billion in market value at the lows, according to Reuters’ estimate, marking one of Oracle’s sharpest single‑session declines of the AI era. ^[2]

Crucially, the damage wasn’t isolated to Oracle:

The Dow Jones Industrial Average and S&P 500 still closed at record highs, helped by sectors less tied to high‑growth tech.
The Nasdaq Composite and tech‑heavy indices finished lower, with Oracle one of the largest individual drags. ^[3]

In other words: by the time the bell rang on December 11, Oracle had reset lower by roughly 11%, and it had already pulled a chunk of the AI and cloud complex down with it.

What Oracle actually reported: strong AI demand, softer revenue, enormous capex

Oracle’s move isn’t about a collapse in business. It’s about how much it’s spending, how fast AI money will show up, and what that means for margins and debt.

From its fiscal Q2 2026 report (quarter ended November 30, 2025): ^[4]

Total revenue:$16.06 billion, +14% year over year
Total cloud revenue (SaaS + IaaS):$8.0 billion, +34% YoY, now 50% of total revenue
Cloud infrastructure (OCI) revenue:$4.1 billion, +68% YoY, helped by 177% growth in GPU‑related revenue
Cloud database & apps:
- Database services +30%
- Fusion Cloud ERP +18%
- NetSuite Cloud ERP +13%

Profitability looked good on paper:

GAAP net income: about $6.1 billion, almost +95% YoY
GAAP diluted EPS:$2.10
Non‑GAAP EPS:$2.26, above Wall Street estimates. ^[5]

But revenue missed by a hair. Multiple outlets report Oracle’s $16.06 billion top line came in just below consensus around $16.21 billion, even as EPS beat. ^[6]

On top of that, the backlog exploded:

Remaining performance obligations (RPO):$523 billion, up 438% year over year and +$68 billion sequentially
About 33% of that RPO is expected to turn into revenue over the next 12 months
The surge reflects mega‑deals with OpenAI, Meta, and NVIDIA, among others. ^[7]

So where’s the problem?

Capital expenditures (capex): about $8.1 billion in the quarter — most of it for AI‑focused data centers and GPUs
Free cash flow: roughly –$7.3 billion in Q2 (negative)
Total debt: around $108 billion in borrowings as of November 30, 2025. ^[8]

And then came guidance:

Q3 FY26 (current quarter):
- Total revenue growth:16–18% in constant currency; 19–21% in USD
- Cloud revenue growth:37–41% in constant currency; 40–44% in USD
- Non‑GAAP EPS:$1.70–$1.74 (16–18% growth). ^[9]
Full‑year FY26 revenue: still targeting $67 billion.
But FY26 capex is now expected to be about $15 billion higher than Oracle’s own forecast from September. ^[10]

In short: AI‑linked demand looks huge on paper, but it’s extremely capital‑intensive and slow to translate into free cash flow. That’s what spooked the market.

Why Wall Street is suddenly scared of Oracle’s AI bet

Several overlapping worries hit at once on December 11.

1. A monster AI build‑out… funded largely with debt

Reuters notes Oracle has burned roughly $10 billion in cash in the first half of its fiscal year as AI investments ramped, and that credit‑default swaps (CDS) on Oracle’s debt have jumped to five‑year highs, reflecting rising concern in bond markets. ^[11]

At the same time:

Oracle’s net debt is near $100+ billion
Management now expects FY26 capex to be $15 billion above prior plans, pushing annual capex into the $50 billion‑plus neighborhood by some estimates. ^[12]

That combination — heavy AI capex + rising leverage + negative free cash flow — is exactly what skeptics of the AI boom have been warning about.

2. Revenue is strong, but not strong enough for this level of spending

Oracle:

Beat on adjusted EPS,
But missed revenue expectations,
And missed a closely watched metric for future cloud contracts, with RPO slightly below some analyst forecasts, even after ballooning to $523B. ^[13]

Meyka, summarizing Street reaction, highlights that traders focused on revenue and free cash flow, not just percentage growth in cloud. When those came in under the most bullish expectations, the stock dropped more than 10% in after‑hours and pre‑market trading, helping push Nasdaq futures lower. ^[14]

Business Insider similarly underscores that Oracle’s $16.06 billion in revenue missed the $16.21 billion consensus, even as cloud sales grew 34% and the company pledged to spend another $15 billion above its prior capex plan — a combination that “revived fears that tech giants are spending too much on AI.” ^[15]

3. Concentration risk: OpenAI, mega‑deals, and “circular” AI spending

Oracle’s AI story is tightly bound to a handful of enormous customers:

A $300 billion contract with OpenAI
Expanded partnerships with NVIDIA and Meta Platforms, which helped push RPO to that $523 billion figure. ^[16]

Reuters points out this concentration risk, noting that much of Oracle’s capex is tied to OpenAI’s plans — and that OpenAI itself has committed to more than $1 trillion in AI spending by 2030 despite still losing money. ^[17]

Some analysts worry about “circular deals” in AI — where the same players partner, supply, and buy from each other — and whether those commitments will ultimately produce the margins investors are currently pricing in. ^[18]

4. The AI bubble narrative just got fresh fuel

Across several outlets, Oracle is now being held up as Exhibit A for AI over‑spending:

Reuters says Oracle’s weak forecasts and soaring capex “fanned doubts” about how quickly big AI bets will pay off, sparking a selloff in AI‑linked stocks like NVIDIA, AMD, Micron, Broadcom and Arm, which fell 3–4% on the day. ^[19]
Business Insider and CoinDesk both flag Oracle’s report as a new “red flag” that tech giants may be getting ahead of themselves with massive AI investments, noting that Nasdaq futures and even Bitcoin dipped as investors reassessed AI risk. ^[20]
A detailed Seeking Alpha breakdown bluntly concludes that AI and debt concerns remain, with Oracle shares down about 15% from pre‑earnings levels and roughly 45% from September highs, driven by massive capex and uncertain AI margins despite rapid cloud growth. ^[21]

At the same time, bulls argue that under‑investing in AI may be riskier than over‑investing, and that these data centers and GPU clusters are revenue‑generating assets whose payoff will become clear over multiple years, not quarters. ^[22]

5. Valuation no longer screams “cheap”

Even after Thursday’s plunge, Reuters data put Oracle’s forward P/E near 29.6, slightly above Microsoft (≈27.2) and roughly in line with Amazon (≈29.1). ^[23]

That means:

ORCL is no longer priced like a classic value stock
The market is still paying an AI premium, even if it’s much smaller than at the September peak

For some investors, Thursday’s move was a reset from “priced for perfection” to “show‑me story.” For others, it’s still not a bargain.

How analysts reacted on December 11

The Street moved quickly.

Reuters reports at least 13 brokerages cut their price targets on Oracle after the earnings release and guidance. ^[24]
Examples from the day:
- JPMorgan cut its target from $270 to $230 and kept a Neutral rating. ^[25]
- Bernstein lowered its target to around $339, citing mixed Q2 results and questions around backlog conversion timing. ^[26]
- UBS trimmed its target to about $325, also focusing on how quickly Oracle can turn its massive AI backlog into revenue and cash. ^[27]

Zacks currently rates Oracle a “Hold” (Rank #3), underscoring that, despite the selloff, this is not an across‑the‑board “sell” call from Wall Street — it’s more of a reset of expectations. ^[28]

Notably, some analysts explicitly defended the capex surge, arguing (as BofA does in Reuters’ coverage) that the current weakness mainly reflects an investment cycle needed to build out infrastructure for unusually fast AI demand. ^[29]

What to watch before the market opens on Friday, December 12, 2025

Heading into the next session, Oracle isn’t just another stock — it’s a barometer for the AI trade and high‑multiple tech in general.

Here are the key factors to keep on the radar before Friday’s U.S. open:

1. Follow‑through in AI and cloud stocks

On Thursday, major AI names — NVIDIA, AMD, Micron, Broadcom, and Arm — fell 3–4% in sympathy. ^[30]
In Asia and Europe, Oracle’s slump also pressured AI‑linked names like SoftBank, which dropped around 7.5% as part of the broader response to Oracle’s AI spending plans. ^[31]

For Friday’s open, investors will watch:

Whether these AI bellwethers stabilize or extend losses
How markets digest Broadcom’s earnings, which were scheduled after Thursday’s close and could reinforce — or ease — concerns about AI infrastructure demand. ^[32]

2. Futures and cross‑asset sentiment

Reuters and CoinDesk both note that S&P 500 and Nasdaq 100 futures fell as Oracle’s earnings hit, with AI bubble fears spilling into crypto and other risk assets. ^[33]
A Meyka recap points out that models repriced tech risk and options markets started assigning a higher probability of further downside in growth stocks after Oracle’s report. ^[34]

If futures remain under pressure into the U.S. morning, Friday’s open could start with another risk‑off tilt in AI‑heavy sectors.

3. Macro backdrop: the Fed just cut, but Oracle stole the show

All this is happening just one day after the Federal Reserve cut rates by 25 bps, to a 3.5–3.75% range, and signaled a slightly less hawkish stance going into 2026. ^[35]

Normally, a Fed cut plus softer yields would be bullish for growth stocks. Instead:

Oracle’s AI spending message overrode the macro tailwind
Investors are now trying to reconcile easier monetary policy with potential over‑investment in AI across big tech

Going into Friday, traders will be watching whether bond yields continue to drift lower (supportive for equities) or whether renewed AI concerns drive a more classic flight to safety.

4. More analyst notes and price‑target resets overnight

The first barrage of downgrades hit on December 11. But Oracle is a mega‑cap, systemically important tech name:

Additional research notes, valuation resets, or rating changes may hit before the December 12 open
Many institutional investors and multi‑asset funds will be recalibrating AI exposure, which can drive further ETF and index rebalancing tied to ORCL’s weight in major benchmarks

Fresh Street commentary can quickly shift sentiment — especially if more high‑profile houses lean clearly bullish or clearly bearish after reviewing the call and numbers in detail.

5. ORCL’s own pre‑market trading range

There are no hard “magic numbers,” but from Thursday’s tape, three levels are psychologically important:

Thursday low: around $186
Thursday close: around $199
Pre‑earnings level (Dec 10 close): about $223 ^[36]

How ORCL trades between those levels in Friday’s pre‑market can offer a quick read on whether:

The selloff is finding a short‑term floor, or
The market is preparing to retest the lows and price in even more skepticism about AI capex and future cash flows

(That price action is information — not a trading recommendation.)

Key medium‑term questions for Oracle after the selloff

Beyond the next open, the real debate around Oracle now turns on a few big questions.

Drawing on Oracle’s filings and recent analyses from TS2, Zacks, Reuters and others, the medium‑term thesis — bull and bear — can be boiled down to five themes. ^[37]

Capex vs. cash flow
- Can Oracle convert a $523 billion backlog into enough high‑margin, recurring revenue to justify $50+ billion a year in capex and turn free cash flow positive again?
- Or will the company be stuck in a long “build now, profit later” phase that keeps investors uneasy?
Debt and credit markets
- With over $100 billion in debt and CDS spreads at multi‑year highs, will bond investors stay comfortable with this AI build‑out?
- Higher financing costs could eventually force Oracle to slow capex, cut buybacks, or rethink its dividend policy.
Durability of AI demand
- Are mega‑contracts with OpenAI, Meta and others the start of a long runway of AI infrastructure spending — or the peak of a 2025–26 bubble that will normalize later?
- If AI spending slows, Oracle’s fixed‑cost base could weigh heavily on margins.
Competitive position vs. hyperscalers
- Oracle’s 68% OCI growth and rapid multicloud expansion show real traction — but competition from AWS, Azure and Google Cloud is fierce.
- The question is whether OCI can grow 50–70% a year long enough to carve out a permanently profitable niche in high‑end AI workloads.
Regulatory and accounting scrutiny
- As AI capex and “as‑a‑service” contracts get bigger, regulators and standard‑setters may look harder at backlog disclosure, AI‑specific accounting, and depreciation policies across big tech.
- That could affect how investors interpret metrics like RPO and adjusted earnings.

Takeaways for investors watching Oracle into December 12

Putting it all together:

Oracle’s December 11 drop is not about a broken business. Cloud and AI revenue are growing fast, and backlog is massive.
The selloff is about pace and payoff. Revenue growth and bookings weren’t strong enough to make investors comfortable with a sudden $15 billion jump in capex, negative free cash flow, and a still‑premium valuation.
ORCL has become a sentiment gauge for the AI trade. How it trades into and after the December 12 open will feed directly into positioning in other AI and cloud names.
The narrative is now sharply split:
- Bulls see a temporarily painful investment cycle building durable AI infrastructure for years of future cash flows.
- Bears see an over‑levered balance sheet, concentrated AI exposure, and a textbook late‑cycle capex blow‑off.

For anyone following ORCL, the next session isn’t just about whether the stock is “cheap” after a 10–15% knock. It’s about whether the market still believes the current AI capex boom will earn its cost of capital — and how quickly.