Oracle's Halo Fades: From AI Star to Stock Price Halved

2026-01-12 08:03:32

Once hailed as the “AI Infrastructure Emperor,” Oracle has experienced a dramatic shift from peak to trough within just four months. The “halo” surrounding the founder, Elliott Alisson, is gradually fading.

From $345 to $177: The End of the Glory Days

In September, Oracle’s stock price soared to $345, briefly making Alisson the world’s richest person. At that time, the market was filled with optimism about the company, with investors believing Oracle had found a new growth engine—becoming the infrastructure provider for the entire AI revolution. RPO (Remaining Performance Obligation) became a key metric that investors flocked to, pouring in large amounts of capital and driving up the stock price.

However, when Oracle issued a warning in its Q2 earnings report, market optimism quickly evaporated. Today, the stock has fallen to $177, nearly 50% below its September peak. This is not just a simple technical correction but a fundamental shake-up of investor confidence.

Two Black Swan Events Destroyed Market Expectations

The “Trap” of Capital Expenditure

In its Q2 earnings, Oracle announced an increase in its capital expenditure budget for FY2026 to $50 billion. This figure raised alarms in the market. Investors suddenly realized that billions of dollars spent on data center construction could not be “free-ridden” through simple bond issuance. The massive capital investment implied high debt risks, directly threatening the company’s financial health.

Delays in Data Center Delivery

Even more disappointing was the delay in project progress. Reports indicate that the data centers Oracle is building for OpenAI will not be operational until 2028 at the earliest. One of the core reasons supporting Oracle’s high valuation was its “execution speed,” but this advantage has now vanished. Without speed, the high valuation loses its most critical support.

Market Reflection and Caution

Oracle’s experience reflects a broader shift in the tech market—from blind enthusiasm for concepts to a focus on fundamentals and risks. Investors are no longer blindly enamored with the “halo” but are beginning to ask more realistic questions: When will these massive investments pay off? Is the debt ratio too high? Can competitive advantages be sustained?

When these questions go unanswered satisfactorily, a decline in stock price becomes inevitable.

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