Shares of Oracle Corp. have retreated more than half from their all-time high reached last year, costing the company about $463 billion in market value as investors reassess the artificial intelligence space and Oracle’s connections to OpenAI.
The company’s peak valuation exceeded $933 billion on September 10, a level that briefly positioned Oracle among the 10 most valuable publicly listed U.S. firms after management laid out robust cloud business projections tied to AI demand.
But optimism around AI investments has cooled. Market participants are increasingly cautious as large technology firms continue to spend heavily on data center expansion and other capital expenditures without clear evidence that those outlays are producing commensurate near-term returns. That shift in sentiment has weighed on companies positioned as AI enablers.
Investors have also expressed concern about so-called circular arrangements involving OpenAI - which remains a private and unprofitable company - and corporate partners, including Oracle and Nvidia. Those arrangements have prompted questions about the sustainability and transparency of revenue and investment flows tied to AI initiatives.
Oracle’s recent capital-raising activity has added to investor wariness. The company has raised tens of billions of dollars through bond offerings, both directly and via projects backed by those financings, a dynamic that market participants have factored into their reassessments.
The stock faced further downward pressure on Thursday, sliding an additional 6% amid broader weakness across the technology sector. The sell-off followed disappointing results from Microsoft, whose shares dropped 11.3% after cloud revenue performance raised doubts about the pace at which investments connected to its OpenAI partnership are delivering returns.
The cumulative effect is a marked re-pricing of expectation for companies tied to AI demand and cloud infrastructure spending. Market participants are now weighing the sizable capital commitments being made against an uncertain timeline for return on investment.
Summary
Oracle’s stock has fallen over 50% from its high achieved last year, eliminating about $463 billion in market value amid cooling AI enthusiasm, concerns over ties with OpenAI, large-scale fundraising through bond sales, and renewed technology sector weakness after Microsoft’s results.