Oracle Shares Plunge Over 10% After Revenue Miss Sparks AI Bubble Concerns

Shares of cloud computing giant Oracle tumbled more than 10% in after-hours trading on Wednesday, after the company reported quarterly revenues that fell slightly short of Wall Street expectations.

Revenue Miss Shakes Investor Confidence

For the quarter ending in November, Oracle posted $16.1 billion in revenue — just under the $16.2 billion analysts had forecast.

Despite the small miss, Oracle still delivered 14% overall revenue growth, powered by a massive 68% jump in sales from its expanding AI cloud division, Oracle Cloud Infrastructure (OCI).

OCI has become a key supplier of AI computing power to major technology firms. Demand for Oracle’s AI infrastructure helped push the company’s stock to record highs earlier this year. But Wednesday’s numbers failed to calm growing fears about whether the AI boom is sustainable — or if an AI bubble is forming.

The OpenAI Mega-Deal and Stock Volatility

One of Oracle’s biggest recent wins was its $300 billion computing contract with OpenAI, announced in September. The agreement, spread over five years, gave Oracle an enormous boost and briefly helped co-founder Larry Ellison become the world’s richest man.

But the excitement has since faded.
Oracle’s share price has fallen roughly 40% from its peak three months ago — although it remains up more than one-third year-to-date.

Ellison Warns of Rapid AI Changes

In a statement on Wednesday, Larry Ellison struck a cautious tone:

“There are going to be a lot of changes in AI technology over the next few years and we must remain agile.”

Ellison also emphasized Oracle’s new “chip neutrality” strategy, signaling the company will not rely solely on Nvidia — the current AI chip powerhouse — and will instead buy computing chips from any manufacturer based on customer needs.

Rising Questions Over AI Deals and Debt

Oracle’s deep involvement in AI infrastructure partnerships, including with Meta, Nvidia, and OpenAI, has raised concerns about “circular financing” — arrangements where large tech companies effectively fund purchases of each other’s services.

Analyst Jacob Bourne of Emarketer noted that Oracle now faces scrutiny over:

• Heavy exposure to OpenAI

• Mounting debt tied to data center expansion

• Investor worries that the AI boom may be overhyped

Oracle issued $18 billion in bonds in September — one of the largest debt raises in tech history — to support its rapid AI infrastructure buildout.

Are Tech Stocks Overvalued?

Some analysts say Oracle’s sharp stock drop reflects broader concerns that tech — especially AI — may be overinflated.

Colleen McHugh from Wealthify explained:

“Many tech stocks are priced for perfection. Even a small revenue miss, like Oracle’s, gets punished.”

However, others argue Wall Street overreacted.

Cory Johnson, chief market strategist at Epistrophy Capital Research, said:

“This was nothing but a great quarter. Revenue growth of 14% is accelerating.”

Johnson also pointed out that Oracle has signed $385 billion in new contracts over the past six months — including massive deals with Meta and Nvidia — yet investor sentiment around AI remains unusually negative.

Broader Business Moves

Beyond cloud and AI, the Ellison family has been expanding its influence in the media world. They recently purchased Paramount and are reportedly leading a bid to acquire another major studio, Warner Brothers Discovery.

Looking Ahead

While Oracle remains one of the strongest players in the global AI infrastructure race, the latest earnings report highlights a growing reality in tech:
even small misses can trigger big reactions in a market priced for flawless performance.

Whether investor fears point to a real AI bubble — or just short-term volatility — remains the key question hanging over Oracle and the wider tech industry.