Oracle’s Little Dilemma

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One observes, with a certain weary inevitability, that Oracle (ORCL 6.38%) shares have been experiencing a distinctly uncomfortable morning. Down nearly 6% as of late morning, and a rather alarming 28% year-to-date, it’s all terribly tiresome, really.

A Spot of Bother in ’26

The source of this minor unpleasantness? Quite simple, darling. The market, in its infinite wisdom, is beginning to fret over Oracle’s ambitions in the artificial intelligence arena, and, more specifically, its rather conspicuous reliance on OpenAI. A partnership built on hope, it seems, is proving…precarious.

Of course, all the hyperscalers are feeling the pinch of extravagant spending commitments. But it’s the two most heavily invested in OpenAI – Oracle and Microsoft – who are bearing the brunt of the market’s disapproval. Alphabet, with its more sensible approach and readily available funds, is managing to navigate the turbulence with considerably more aplomb. One might almost call it good management.

The anxieties surrounding Oracle are escalating as its free cash flow and capital expenditure appear to be diverging in rather dramatic fashion. One can’t help but wonder if someone hasn’t miscalculated. Though, frankly, it wouldn’t be the first time.

The Latest Whispers

As we discussed last week, the news that Nvidia would commit a mere $30 billion to OpenAI’s latest funding round – a far cry from the anticipated $100 billion – sent a rather noticeable shiver through the market. But that, as they say, is old hat. The latest gossip, courtesy of The Information, suggests that the Stargate project – that ambitious joint venture involving Oracle, OpenAI, and Softbank – has stalled due to disagreements over its structure. Honestly, one wouldn’t expect a smooth operation with so many egos involved.

Recall that Oracle and OpenAI inked a $300 billion deal last autumn, and Oracle shares have been under considerable pressure ever since. These recent reports are merely adding fuel to the fire. Until OpenAI can convince the market that securing funding isn’t a problem, Oracle’s stock is likely to remain…unsettled. One suspects a good deal of hand-wringing is going on in boardrooms at present.

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2026-02-23 20:44