Oracle Crashes 15%, Pulls Nvidia, AMD, and Micron Down With It

• Oracle (ORCL) shares dropped nearly 14% to $192.45 after reporting quarterly revenue of $16.06 billion, missing analyst expectations of $16.21 billion, despite strong AI infrastructure demand, triggering declines in related stocks like Nvidia (NVDA), AMD (AMD), and Micron (MU).
• The company is aggressively expanding AI cloud infrastructure, backed by a $300 billion OpenAI deal, $18 billion bond issuance, and plans for $20 – 30 billion annual debt raises, with full-year capex expected at $50 billion and negative free cash flow of about $10 billion in the November quarter.
• Analysts view the sell-off as a buying opportunity, citing robust AI demand and healthy cloud backlog, while Oracle maintains year-to-date gains of more than 15% and explores financing alternatives to manage debt efficiently.

Oracle Corporation (ORCL) experienced a sharp decline in its stock price, falling nearly 14% to $192.45 on Thursday, with an intraday low of $186.23. This reaction stemmed from the company’s quarterly revenue of $16.06 billion, which fell short of the $16.21 billion anticipated by analysts per LSEG data, even amid strong demand for artificial intelligence infrastructure.

The miss contributed to broader pressure on AI-related stocks. Nvidia (NVDA) dropped 3.28% to $177.75, Advanced Micro Devices (AMD) declined 3.13% to $214.50, Micron Technology (MU) fell 2.88% to $256.11, and CoreWeave (CRWV) decreased 4.55% to $84.15.

Oracle has intensified its focus on cloud infrastructure to capture AI contracts, competing directly with Amazon.com (AMZN), Microsoft (MSFT), and Alphabet’s (GOOG, GOOGL) Google. A notable development included a $300 billion deal with OpenAI, alongside a $18 billion bond issuance in September-one of the largest in tech industry history. The company has also obtained billions in construction loans from banks for data centers in New Mexico and Wisconsin.

Financing remains a key area of investor scrutiny. Citi (C) analyst Tyler Radke estimates Oracle will raise $20 billion to $30 billion in debt annually over the next three years. Principal Financial Officer Doug Kehring emphasized maintaining an investment-grade debt rating during the earnings discussion. He highlighted alternative options, such as customers providing their own chips for installation in Oracle data centers or suppliers leasing chips, which could reduce borrowing needs significantly below current models.

Capital expenditures are projected at approximately $50 billion for the full year, increased from a prior $35 billion estimate as of September, compared to $21.2 billion in fiscal 2025. Free cash flow for the November quarter registered negative approximately $10 billion, wider than the StreetAccount consensus of negative $5.2 billion-a metric under close watch given concerns over AI investment sustainability and debt repayment capacity.

Analysts at Wedbush Securities described the negative free cash flow as a manageable issue driven by robust AI demand, noting that Oracle’s AI and cloud metrics, including backlog, reflect strong sector momentum. They viewed any resulting sell-off as a potential buying opportunity.

Despite the recent downturn, Oracle’s shares have advanced more than 15% year-to-date. The company’s strategic positioning in AI cloud services continues to drive interest, though execution on infrastructure expansion and financing efficiency will remain critical for sustaining investor confidence in this competitive landscape.

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