Published: November 25, 2025
Oracle’s spectacular AI-driven rally has flipped into an equally dramatic hangover.
Just weeks after Larry Ellison briefly claimed the title of world’s richest person on the back of a $300 billion cloud deal with OpenAI, Oracle’s share price has gone into reverse. The stock is now down more than 39% in two months, wiping roughly $130 billion from Ellison’s net worth and knocking him down to third place on the Bloomberg Billionaires Index, behind Elon Musk and Alphabet co‑founder Larry Page. [1]
On Tuesday, November 25, Oracle shares were trading around the $190–$200 range, extending a month-long slide that’s turned the company into Wall Street’s favorite stress test for AI risk. [2]
From AI Euphoria to Market Hangover
The current drama has its roots in early September.
On September 9, Oracle reported fiscal Q1 2026 results that stunned the market:
- Total revenue rose 12% year-on-year to $14.9 billion.
- Cloud revenue reached $7.2 billion, up 28%.
- Cloud infrastructure (OCI) revenue jumped 55%.
- Remaining performance obligations (RPO) — essentially future contracted revenue — exploded 359% to $455 billion. [3]
Oracle then went a step further with a jaw-dropping forecast: OCI revenue, it said, could grow 77% this fiscal year to $18 billion, and potentially climb to $144 billion over the following four years. Much of that, executives boasted, was already booked in RPO. [4]
Part of the excitement came from a once‑unthinkable mega‑contract:
- OpenAI agreed to purchase $300 billion of cloud computing from Oracle over roughly five years starting in 2027, under a project known as “Stargate.” [5]
- The deal underpins a plan to build multi‑gigawatt data centers — among the largest AI facilities ever conceived. [6]
Investors went into full‑on AI euphoria. Oracle’s shares jumped more than 23–36% around the earnings and deal announcements, briefly pushing the company toward a $1 trillion valuation and sending Ellison’s fortune up by about $89 billion in a single day — the biggest one‑day gain ever recorded by Bloomberg’s wealth index. [7]
Today’s sell‑off is that euphoria running in reverse.
The ‘Astonishing’ $300 Billion OpenAI Deal Is Now Underwater
What looked like Oracle’s crowning triumph is now at the center of investor anxiety.
A widely discussed analysis in the Financial Times (echoed across tech and finance blogs) argues that the $300 billion OpenAI contract has effectively moved “below water.” Since Oracle announced the deal in September, its market value has fallen by around $315 billion — more than the nominal value of the contract itself, implying a negative “deal value” of roughly –$74 billion in the eyes of equity investors. [8]
Critics highlight several pressure points: [9]
- Extreme capital intensity
Oracle is racing to build huge AI data centers, with outside estimates suggesting capital expenditure could need to climb toward $80 billion per year by the end of the decade to support OpenAI and other hyperscale clients. - Surging leverage
Oracle has already raised $18 billion in bonds and now carries around $104 billion of total debt. Reports suggest it may add another $38 billion to fund its AI build‑out. [10] - Negative free cash flow risk
With spending outpacing operating cash generation, analysts warn that Oracle could spend several years cash‑flow negative if OpenAI and other customers don’t ramp as quickly as forecast. [11] - Credit markets flashing yellow
Oracle’s bonds have sold off since mid‑November, and the cost of insuring its debt via credit‑default swaps (CDS) has roughly tripled, with five‑year protection now quoted around $111,000 per year per $10 million of debt, according to Bloomberg data cited by Insider Monkey. [12]
Put bluntly, the market is asking: What if Oracle overbuilt for an AI future that arrives more slowly — or less profitably — than promised?
Ellison’s Wealth Roller‑Coaster
No one is feeling the swing more personally than Oracle’s founder.
A recap of the last few months: [13]
- Early September 2025 – Oracle stock rips higher on earnings and AI guidance, briefly making Larry Ellison the world’s richest person.
- Today – Oracle’s slump has erased about $130 billion from Ellison’s fortune.
- According to Bloomberg’s Billionaires Index, Ellison now sits at roughly $253 billion, in third place behind Elon Musk (about $422 billion) and Larry Page (about $257 billion).
The reversal underscores how tightly Ellison’s wealth is tied to Oracle’s share price — and how quickly fortunes can reverse in an AI‑driven market.
Why Oracle Stock Is Down More Than 39% in Two Months
A deep dive into the numbers shows this isn’t just an “AI bubble” story — it’s a cocktail of execution risk, leverage, and leadership change.
1. AI bubble fears and thin margins
Investors got an unpleasant surprise in October, when internal data reported by The Information and CNBC suggested Oracle lost nearly $100 million in a single quarter renting Nvidia’s latest Blackwell GPUs for its AI cloud. Revenue from those rentals was growing, but not enough to offset steep hardware costs, leaving margins far below what many assumed. [14]
That revelation fed into a narrative that the AI infrastructure gold rush may be less profitable than promised — at least in the short run.
2. Leadership shake‑up at the top
On September 22, Oracle announced that long‑time CEO Safra Catz would step down from the chief executive role after 11 years to become executive vice chair of the board. Internal leaders Clay Magouyrk (cloud infrastructure) and Mike Sicilia (applications and AI) were promoted to co‑CEOs, a move designed to underline Oracle’s pivot to AI and cloud. [15]
While the transition had been widely praised strategically, Insider Monkey notes that Oracle’s stock started to fall sharply following the leadership announcement, as some investors fretted about timing and execution risk midway through a huge AI build‑out. [16]
3. Debt pile keeps growing
The recent Insider Monkey / Yahoo Finance breakdown — “Here’s Why Oracle Corporation (ORCL) Has Fallen More Than 39% in 2 Months” — highlights the rapid rise in Oracle’s leverage: [17]
- $18 billion of new bond issuance last month.
- Total debt now above $100 billion.
- Plans to add another $38 billion in debt for AI data centers, according to Reuters.
That combination has pushed more traders into hedging Oracle’s credit via CDS — a clear sign that, even if default is seen as unlikely, the market now views Oracle as a key gauge of AI‑related credit risk. [18]
4. Analysts cut targets but keep the faith (for now)
Despite the stock’s slump, many Wall Street analysts are still bullish:
- Jefferies’ Brent Thill reaffirmed a Buy rating with a $400 price target.
- Robert W. Baird’s Robert Oliver also kept a Buy but cut his target from $365 to $315 on November 18. [19]
And today, D.A. Davidson trimmed its Oracle target from $300 to $200, explicitly citing the company’s rising debt load and its heavy dependence on OpenAI for future growth. Even so, the brokerage still sees default as unlikely and notes that 32 of 45 analysts rate Oracle a Buy or better, with a median target price of $360 — far above current levels. [20]
What’s New Today – November 25, 2025
Beyond the big-picture concerns, several fresh headlines are shaping sentiment this Tuesday:
- D.A. Davidson’s downgrade ripple
As noted, D.A. Davidson’s sharp cut to a $200 price target has reinforced the message that Oracle may have to slow its AI build‑out, write down some land and power contracts, and prioritize deleveraging if demand from OpenAI doesn’t materialize on schedule. [21] - Valuation reset, but fundamentals intact?
A new note from Simply Wall St points out that Oracle’s stock has fallen about 29% over the past month, yet its revenue and pricing power haven’t collapsed. The firm argues that the sell‑off is more about expectations and risk perception than a sudden deterioration in the underlying business. [22] - Political optics: a small insider sale
MarketBeat reports that U.S. Representative Lisa C. McClain recently sold a modest amount of Oracle shares (between $1,001 and $15,000) from a 401(k), a routine‑sized trade but one that adds to the sense that high‑profile holders are trimming exposure around the margins. [23]
Taken together, the message from November 25’s news flow is simple: the market is still digesting how big, how risky, and how profitable Oracle’s AI ambitions will actually be.
Oracle as a Test Case for the AI Debt Wave
Oracle’s slump is increasingly being framed as a case study for the broader AI funding boom.
A separate Reuters analysis of “AI‑linked debt” notes that big tech players — including Oracle, Microsoft, Alphabet and Amazon — are all issuing large amounts of bonds to fund data centers and advanced chips. But Oracle stands out because so much of its future growth is tied to a single AI customer (OpenAI) and because its RPO includes huge amounts of capacity that won’t be used for years. [24]
Meanwhile, critics like Michael Burry (of The Big Short fame) have warned that tech giants may be stretching GPU depreciation schedules to smooth earnings, fueling fears of an “AI bubble.” Others argue that those fears are overstated and that GPUs can be profitably used for 6–8 years across training and inference workloads, even as newer chips appear. [25]
In this debate, Oracle has become the market’s Rorschach test:
- If you believe AI demand will explode and stay profitable, the current slump looks like a buying opportunity in a future cash‑machine.
- If you think AI is overbuilt and overhyped, Oracle’s bond spreads and CDS pricing look like the first cracks in a leveraged bubble.
Key Numbers at a Glance
Here’s where things stand as of November 25, 2025 (rounded, based on public filings and market data):
- Share price: roughly $190–$200, down >39% from early September highs near $345. [26]
- Market value lost since OpenAI deal announcement: about $315 billion. [27]
- Total debt: around $104 billion, with plans reported to add $38 billion more. [28]
- OpenAI contract:$300 billion over roughly five years starting 2027 (Project Stargate). [29]
- Remaining performance obligations (RPO): about $455 billion, up 359% year‑on‑year in Q1 FY26. [30]
- Ellison’s net worth: approximately $253 billion, down by about $130 billion from his September peak. [31]
What It Means for Investors and the AI Story
It’s tempting to view Oracle’s plunge as the “beginning of the end” for the AI trade. The reality is more nuanced.
Three broad scenarios are now being debated on Wall Street:
- AI boom, Oracle wins big
Demand from OpenAI and other hyperscalers eventually fills most of the capacity Oracle is racing to build. OCI hits something close to its aggressive revenue targets, margins expand as early mis‑priced contracts roll off, and today’s worries about debt fade into the background. - Overbuild and reset
AI demand grows, but not nearly fast enough to justify every gigawatt of data‑center capacity now being funded. Oracle slows its build‑out, sells or writes down some power and land commitments, and refocuses on more profitable workloads. Debt becomes manageable, but returns are lower and slower than investors hoped. - Hard landing for AI infrastructure
OpenAI and other top clients fail to reach revenue projections, regulatory or antitrust pressure intensifies, and capital markets turn hostile to heavily leveraged AI bets. In this scenario, Oracle’s CDS and bond spreads keep widening, and its stock becomes a proxy not just for AI risk, but for systemic tech‑credit risk.
No one knows which path will play out. But there’s broad agreement on what to watch next:
- Oracle’s next few earnings reports and updated capex guidance.
- Evidence that OpenAI is actually ramping usage and paying for it at the scale implied by the $300 billion deal.
- The behavior of credit markets — especially Oracle’s bond spreads and CDS prices.
- Any regulatory or antitrust action around “circular financing” in AI, where the same players fund, supply, and consume each other’s infrastructure. [32]
The Bottom Line
On November 25, 2025, Oracle is no longer just a database and cloud company — it’s a live‑fire experiment in how far, and how fast, the AI infrastructure boom can be leveraged.
The same OpenAI deal that made Oracle look invincible in September now sits at the center of Wall Street’s worries about debt, execution, and AI hype. Larry Ellison’s $130 billion wealth swing is dramatic, but the bigger story is what Oracle’s trajectory will say about the sustainability of the entire AI build‑out.
For now, one thing is clear: if you want to understand where the AI trade goes next, you can’t ignore what happens to Oracle.
This article is for informational purposes only and does not constitute investment advice. Always do your own research or consult a licensed financial adviser before making investment decisions.
References
1. www.businesstimes.com.sg, 2. simplywall.st, 3. investor.oracle.com, 4. s23.q4cdn.com, 5. www.theverge.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.ft.com, 9. www.ft.com, 10. www.insidermonkey.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.businesstimes.com.sg, 14. www.theinformation.com, 15. www.oracle.com, 16. www.insidermonkey.com, 17. www.insidermonkey.com, 18. www.reuters.com, 19. www.insidermonkey.com, 20. www.tradingview.com, 21. www.tradingview.com, 22. simplywall.st, 23. www.marketbeat.com, 24. www.reuters.com, 25. www.reuters.com, 26. m.economictimes.com, 27. www.ft.com, 28. www.reuters.com, 29. www.theverge.com, 30. investor.oracle.com, 31. www.businesstimes.com.sg, 32. www.reuters.com
