Oracle Stock Plunges on AI Spending Fears: ORCL Price Action, Earnings Shock and 2026 Outlook After the November 21 Sell-Off

Oracle Corporation (NYSE: ORCL) has gone from AI market darling to one of the clearest symbols of the “AI reset” since late November. After a sharp slide around November 21, 2025 and another jolt following fiscal Q2 2026 results on December 10, investors are re‑pricing how much debt, data‑center spending and AI hype they are willing to tolerate in Oracle’s stock.

As of December 11, 2025, ORCL trades around $223 per share, roughly 35% below its early‑September record near $345 but still well above its 12‑month low near $119. ^[1]

Below is a deep dive into what has happened since November 21, 2025, what the latest earnings and guidance really say, and how Wall Street now frames the 2026 risk–reward for Oracle stock.

1. Where Oracle Stock Stands After the AI Comedown

Over the past year, Oracle’s share price has swung from euphoria to reality check:

52‑week range: roughly $118.86 – $345.72. ^[2]
At its early‑September high, ORCL briefly flirted with a near‑trillion‑dollar narrative on the back of a massive AI cloud deal with OpenAI. ^[3]
By mid‑November, the stock had fallen more than 40% from that peak, wiping hundreds of billions of dollars in market value and prompting some outlets to call Oracle the “poster child” for AI‑related excess. ^[4]

Even after the rebound off its late‑November lows, Trefis estimates Oracle trades at a trailing P/E around 45, with free cash flow margins turning slightly negative as capital expenditures surge. ^[5]

In short: the business is still growing fast, but the stock has been forced down from “AI dream pricing” into something closer to a test of how much AI infrastructure risk investors are willing to carry.

2. What Happened on November 21, 2025?

A high‑volume slide as AI enthusiasm cools

November 21, 2025 marked a key inflection point in the recent sell‑off:

ORCL fell about 5.8% intraday, trading as low as $193.55 and closing near $198.54, down from a prior close around $210.69.
Trading volume that day topped 44 million shares, roughly 180% of the stock’s average daily volume, signaling broad‑based selling rather than a niche move. ^[6]

MarketBeat noted that, despite the drop, analysts still carried a “Moderate Buy” consensus rating with an average price target near $322, and a heavy tilt toward Buy ratings over Hold or Sell. ^[7]

At the same time, macro coverage of the broader market framed Oracle as part of an “AI slump”: stocks heavily tied to AI infrastructure and cloud spending were hit as investors digested how much capital these companies are pouring into data centers before seeing commensurate cash returns. ^[8]

3. Debt and Bond Market Warnings: The Pre‑Earnings Red Flag

The stock sell‑off didn’t happen in isolation. Just days earlier, fixed‑income investors had started to show their discomfort.

A November 14 Reuters report highlighted that Oracle’s bonds sold off after CNBC reported the company planned to add another $38 billion in debt to fund AI infrastructure. At that point, Oracle already had about $104 billion of debt outstanding, including roughly $18 billion in bonds. ^[9]

Yields on some key Oracle notes ticked higher, and credit analysts warned that:

Oracle is spending more than it generates from operations to build AI data centers.
The company is leaning heavily on debt while also keeping share buybacks and dividends in place.
High‑profile investors like Michael Burry have questioned whether tech giants, including Oracle, are stretching depreciation schedules to make AI investment look smoother in the earnings line, potentially inflating reported profits sector‑wide. ^[10]

These concerns set the backdrop for the next leg of the ORCL story: fiscal Q2 2026 earnings.

4. Fiscal Q2 2026 Earnings: Strong Growth, but Not Strong Enough

On December 10, 2025, Oracle reported results for its fiscal second quarter ended November 30:

Total revenue: about $16.1 billion, up 14% year‑on‑year. ^[11]
Cloud revenue (IaaS + SaaS): roughly $8.0 billion, growing about 34%. ^[12]
Cloud infrastructure (OCI): around $4.1 billion, up about 68%, but a bit shy of the most aggressive expectations. ^[13]
Remaining performance obligations (RPO): a record $523 billion, up well over 400% year‑on‑year, driven by large multi‑year AI cloud deals with OpenAI, Meta, Nvidia and others. ^[14]
GAAP diluted EPS: approximately $2.10;
Non‑GAAP EPS:$2.26, up more than 50%, helped by a roughly $2.7 billion gain from selling Oracle’s stake in chip designer Ampere. ^[15]

On paper, those numbers look powerful: double‑digit revenue growth, cloud infrastructure revenue still rising at a rapid clip, and a backlog that gives multi‑year visibility into demand for Oracle’s AI and cloud services.

However, several issues overshadowed the headline growth:

Revenue was only slightly above, or even a touch below, very high Wall Street expectations, especially in the most hyped AI infrastructure lines. ^[16]
Profitability depended partly on one‑off gains, making some investors question the underlying earnings power of the core business. ^[17]
The company’s guidance for fiscal Q3 implied strong, but not explosive, growth.

5. Guidance Shock: Capex Jumps to $50 Billion

The biggest surprise wasn’t in the rear‑view mirror, but in Oracle’s outlook.

According to Reuters and The Guardian, executives told investors that:

Fiscal 2026 capital expenditures are now expected to be around $50 billion, up from the $35 billion Oracle had projected as recently as its September earnings call – a $15 billion increase, or about a 40% jump in planned spending. ^[18]
Oracle’s measure of future cloud contracts – the $523 billion RPO – fell just short of Street estimates, which had penciled in about $526 billion. ^[19]
The company forecast Q3 revenue growth of roughly 16–18%, below consensus expectations near 19–20%. ^[20]

The Guardian estimated that these “disappointing” results and the capex shock wiped more than $70 billion off Oracle’s market value, with shares dropping around 11–12% in the immediate aftermath. ^[21]

Layered on top of the earlier bond market worries, the message was clear: Oracle is doubling down on AI data centers, funding much of it with debt, and investors are no longer willing to blindly pay any price for that strategy.

6. Balance Sheet and AI Bubble Fears

Recent coverage has zeroed in on three inter‑linked themes:

6.1 Rising debt and leverage

Oracle’s long‑term debt has climbed to roughly $100 billion, up about 25% year‑on‑year, and could rise further if the reported additional $38 billion in AI infrastructure funding materializes. ^[22]
Free cash flow margins have compressed into negative territory in some recent periods as capex outruns cash generation. ^[23]

Credit analysts generally frame this as a “bump in the road” rather than an existential crisis, but they also warn that the economics of hyperscale AI data centers are still unproven over the full asset life. ^[24]

6.2 AI bubble and “circular” deals

Several outlets, including The Guardian and Investopedia, note that:

Oracle’s AI backlog is highly concentrated, with big commitments from OpenAI, Meta and other large tech names.
Some of these deals involve customers that are also suppliers or financing partners, raising concerns about “circular” AI spending where tech giants effectively fund each other’s capex. ^[25]
November’s broader market rout saw leading AI‑themed stocks collectively lose hundreds of billions in market value, with Oracle frequently cited as a case study in how quickly AI euphoria can reverse. ^[26]

6.3 Accounting and transparency criticism

Commentators like Michael Burry argue that large AI players may be using overly long depreciation schedules for AI equipment that becomes obsolete in three to four years, potentially overstating earnings across the sector by hundreds of billions of dollars over the 2026–2028 period. ^[27]
Some equity analysts also question whether Oracle’s RPO figure fully reflects firm, take‑or‑pay contracts, or if part of it represents flexible, usage‑based commitments that could be dialed back if AI spending slows. ^[28]

There is no regulatory finding of wrongdoing, but the debate has clearly shifted skepticism from being a fringe view to something investors now price into ORCL’s valuation.

7. The Bull Case: Backlog, Cloud Momentum and Dividend Growth

Despite the volatility, bulls argue that the recent correction is more about expectations resetting than a broken business.

Key points from more constructive analyses:

The $523 billion AI and cloud backlog gives Oracle multi‑year visibility and potential operating leverage if it can convert those commitments into high‑margin, recurring revenue. ^[29]
Cloud and AI‑related lines are still expanding rapidly, with OCI’s revenue rising around 60–70% year‑over‑year, albeit from a smaller base than hyperscale rivals. ^[30]
Oracle continues to roll out generative AI services across Oracle Cloud Infrastructure and has deepened partnerships with Nvidia, Meta and Google’s Gemini, which could broaden its AI customer base beyond a handful of marquee names. ^[31]

On the income side:

Oracle pays a quarterly dividend of $0.50 per share, or $2.00 annually.
At recent prices, that equates to a forward yield under 1%, but the dividend has a five‑year growth rate around the mid‑teens and a payout ratio in the mid‑40% range, suggesting room for continued growth. ^[32]

Dividend‑focused analysts see Oracle less as a pure yield play and more as a dividend‑growth and covered‑call candidate, given the low headline yield but strong historical growth and rich options premiums. ^[33]

8. The Bear Case: Valuation, Capex Overhang and Execution Risk

More cautious research pieces, such as those from Trefis and EBC Financial Group, highlight several downside risks: ^[34]

Valuation still rich: Even after the correction, ORCL trades at a P/E multiple materially above the broader market and many software peers, while free cash flow is temporarily squeezed by capex.
Capex and debt burden: Pushing AI capex toward $50 billion in FY 2026 with debt likely exceeding $100 billion is a bold bet that assumes a robust, sustained AI compute cycle and strong pricing power. ^[35]
Cloud market share and competition: Oracle’s share of the global cloud infrastructure market remains low single digits, far behind AWS, Microsoft Azure and Google Cloud. That means high growth has to continue for years just to reach scale parity. ^[36]
Client concentration and healthcare drag: Heavy dependence on a small set of mega‑clients (OpenAI, Meta and other hyperscalers) and ongoing challenges integrating Oracle Health (Cerner) add execution risk. ^[37]
History of deep drawdowns: Trefis notes that Oracle has seen 40–70% peak‑to‑trough declines in past market shocks, underscoring that even strong franchises are not immune when sentiment turns. ^[38]

9. What Wall Street Is Doing With Its Oracle Forecasts

Since late November, several major firms have trimmed but not abandoned their bullish stances:

Earlier in the quarter, MarketBeat data showed a “Moderate Buy” consensus with an average target around $320, based largely on AI‑driven growth expectations. ^[39]
More recently, brokers including Barclays and Citi cut their price targets (for example, from the high‑$300s down into the low‑ to mid‑$300s) but kept Overweight/Buy ratings. ^[40]
TD Cowen lowered its target to $350 from $400, while Cantor Fitzgerald reduced its target to $320, citing concerns around the scale and payback period of AI investment. ^[41]

Taken together, that leaves a cluster of Street targets broadly in the low‑ to mid‑$300s, still well above the current share price around $220–$230, but with less upside than before and a clearer acknowledgement of execution risk.

10. ORCL Stock: What to Watch Into 2026

For investors tracking Oracle into 2026, the key questions that emerge from recent news, forecasts and analyses since November 21 are:

Capex vs. cash flow:
- Can Oracle convert its $523 billion backlog into enough high‑margin, recurring revenue to support $50 billion‑plus annual capex and start rebuilding free cash flow?
Debt and credit markets:
- Will bond investors remain comfortable with Oracle adding tens of billions in new debt, or will higher financing costs force management to slow capex or adjust capital returns? ^[42]
AI demand durability:
- Are mega‑contracts with OpenAI, Meta and others a durable, expanding revenue stream, or will 2025–2026 be remembered as the peak of an AI capex bubble? ^[43]
Competitive position:
- Can OCI continue growing 50–70% a year long enough to carve out a meaningful, profitable share of global cloud infrastructure, or will hyperscalers permanently dominate the high‑end AI workload market? ^[44]
Regulatory and accounting scrutiny:
- How will regulators and standard‑setters respond to concerns over depreciation, AI accounting and backlog disclosure across big tech?

11. Bottom Line

Since November 21, 2025, Oracle stock has become a barometer for the AI trade itself:

Bulls point to booming cloud and AI revenues, a massive backlog, and a business that – despite the volatility – is still growing faster than most large‑cap peers.
Bears highlight stretched valuation multiples, a rapidly rising debt load, heavy reliance on a few AI mega‑clients and the possibility that 2025’s AI boom will not justify the current capex binge.

At today’s prices, ORCL sits between those two narratives: cheaper and more controversial than it was in September, but far from “bargain bin” territory.