NEW YORK, June 23, 2026, 11:27 EDT
Oracle shares dropped 2.7% to $170.32 in late-morning New York trading Tuesday. The move came after the company said in its annual report that its workforce was down by around 21,000 in fiscal 2026, raising investor worries about the cost of its AI plans. Oracle touched $165.00 earlier. The company’s market value now sits near $496 billion.
Poor timing for tech stocks. U.S. technology shares dropped as investors pulled money from semiconductor and AI-linked names. Both the Nasdaq and S&P 500 traded at more than one-week lows. Nigel Green, chief executive of deVere Group, said the AI trade was so crowded that “the exit door becomes very small very quickly.” Reuters
Oracle is looking to ride a surge in AI demand into a bigger cloud-infrastructure business, hoping to take on larger competitors. But for the stock, the focus has moved. It’s not just about whether customers want its capacity. The issue now is if Oracle can build data centers at the right pace without putting too much pressure on cash flow, margins, and its balance sheet.
Oracle ended the quarter with $638 billion in remaining performance obligations, or RPO, up 363% from last year. The company saw negative free cash flow of $23.7 billion for fiscal 2026 as capital spending hit $55.66 billion.
The company raised $43 billion in debt and $5 billion in equity in fiscal 2026. It’s planning to bring in roughly $40 billion more in fiscal 2027 through both debt and equity deals, counting the previously disclosed $20 billion at-the-market stock sale. The financing plan is now a key topic among shareholders.
Oracle has landed major data-center contracts with OpenAI and Meta, aiming to catch up with Amazon and Microsoft in the cloud. Earlier this month, Chief Executive Clay Magouyrk told analysts that delivery “continues to accelerate.” Chief Financial Officer Hilary Maxson said gross margins would “step down” as new projects get going. Jacob Bourne, analyst at eMarketer, said it bluntly: “The demand is real,” but the “funding question is getting harder.” Reuters
AI stocks moved in different directions. Nvidia dropped 3.7% as chips sold off, but Microsoft added 1.9% and Amazon was up 0.6%. Investors didn’t just sell everything linked to cloud or AI.
The split matches what’s showing up elsewhere. Ross Mayfield, investment strategy analyst at Baird, said the recent tech pullback was “highly concentrated and flow-driven,” but not a total break in the AI growth narrative. Reuters
But the risks are plain. If customers fall behind on payments, if growth in AI demand drops off, or if Oracle ends up needing extra capital, then the stock might get hit again—more debt, thinner free cash flow, and the risk of dilution if it sells more shares. Rivals like Microsoft and Amazon bring in more cash and can keep cloud investments up without relying so much on debt or outside money.
Oracle’s backlog isn’t the issue. The cost of delivery is. The focus now is on how fast the company can turn those orders into revenue and whether the latest job cuts and cash flow worries fade or signal something deeper.
