Oracle's AI Strategy Shake-Up Sparks Market Jitters As Shares Plunge 25%

Author: Bibhu Pattnaik | November 16, 2025 02:46pm

Oracle Corporation (NYSE:ORCL) has seen a significant market reaction following its bold shift towards artificial intelligence (AI), resulting in a 25% drop in shares over the past month.

What Happened: Oracle’s ambitious entry into the AI sector, fueled by substantial borrowing, has caused unease on Wall Street.

The tech behemoth has pledged to invest hundreds of billions in the next few years on chips and data centers, primarily to bolster computing capacity for OpenAI, the creator of ChatGPT.

As reported by the Financial Times, the magnitude and speed of Oracle’s strategic shift have caused investors to question, especially at a time when the spending patterns of large tech firms building massive data centers, or hyperscalers, are under scrutiny.

Oracle’s shares have taken a 25% hit in the past month, almost twice the decline of the next worst-performing hyperscaler, Meta. This downturn has erased over $250bn in market value gains that Oracle had accumulated after announcing its OpenAI deals in September.

Also Read: Top Analyst Says Oracle’s ‘Irresponsible’ AI Bet Differs From ‘Healthy’ Microsoft And Google Demand

Oracle’s delayed switch from software to cloud computing, coupled with its hefty wager on AI, has raised particular alarm.

Why It Matters: Despite the market’s response, Oracle remains confident that the potential benefits will outweigh the risks, pointing to the rapidly increasing demand for AI, which far exceeds the current supply of computing power.

Oracle’s bold move into AI represents a significant shift in strategy, and the market’s reaction underscores the risks associated with such a pivot.

However, with the growing demand for AI and the potential rewards on offer, Oracle’s gamble could yet pay off.

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