New York, Jan 14, 2026, 11:05 EST — Regular session underway.
- Oracle shares fell roughly 4% in late morning trading, having peaked at $202.44 earlier.
- Oracle announced a new deal with the UK Ministry of Defence to move legacy systems onto Oracle Cloud Infrastructure.
- KeyBanc stuck with its Overweight rating and kept the price target at $300, saying the stock appears undervalued.
Oracle shares dropped roughly 4% on Wednesday, despite the company announcing a new cloud deal with Britain’s Ministry of Defence and a positive analyst note aiming to support the stock. The shares slipped 4.1% to $194.09, following a close of $202.29 on Tuesday.
This move is significant because Oracle’s stock has been behaving more like a vote on major cloud investments than just a steady database play. Shares dropped last month after the company missed its quarterly forecasts and warned of much higher spending, raising fresh questions about the pace of returns from its AI infrastructure bets.
In this environment, investors have been snapping up any sign of steady demand for Oracle Cloud Infrastructure, Oracle’s cloud platform. Public-sector contracts provide a boost, though they often involve lengthy ramp-up periods.
Oracle announced a deal with the UK Ministry of Defence to move legacy tech systems onto Oracle Cloud Infrastructure (OCI) as the MoD pushes to modernize and boost its use of data and AI tools. “The OCI agreement strengthens the long standing strategic relationship between MoD and Oracle,” said Victoria Cope, the MoD’s commercial director. Oracle executive Jason Rees added the migration can happen “rapidly and at scale” without the need for “complicated and costly rewrites.” Financial details were not disclosed. 1
The announcement came while traders were still wrestling with whether Oracle’s cloud expansion is pulling in enough contracts to justify the hefty bills.
KeyBanc Capital Markets reaffirmed its Overweight rating on Oracle, maintaining a $300 price target, according to a note cited by Investing.com. Using a sum-of-the-parts valuation, the firm highlighted that “either one or both are being undervalued,” ultimately calling Oracle’s stock “attractive.” 2
The broader market provided little support. Software shares stumbled in the last session, with Salesforce tumbling 6.5% and Adobe dropping 5.4%. Investors are weighing concerns that generative AI might dampen demand for established software offerings. 3
Oracle is caught in the middle of this debate. While it continues to sell core database and business applications, the company is also pushing to expand its cloud infrastructure business, competing with giants like Amazon and Microsoft.
Wednesday’s big news comes with a familiar snag: the MoD deal lacks any financial details. If investors see the contract as having little immediate impact on revenue, the stock will likely remain focused on broader issues like spending levels, funding, and how fast cloud adoption is accelerating.
Oracle plans to pay a $0.50 per share cash dividend on Jan. 23 to shareholders recorded by Jan. 9. While unlikely to shift markets, it’s a shareholder-friendly move. 4
Looking ahead, all eyes shift to Oracle’s upcoming earnings report. According to its investor FAQ, the company plans to release fiscal third-quarter results in mid-March 2026. Investors will be digging through that report for clues on cloud demand and expenses tied to expanding capacity. 5
For now, traders are seeing if Oracle’s selloff will stabilize following Wednesday’s dip. The next major events to watch are the Jan. 23 dividend date and the mid-March earnings report.
