Oracle’s AI Ambitions Rattle Markets but Fuel Big Bets

Oracle ( (ORCL) ) has fallen by -7.29%. Read on to learn why.

Oracle shares fell 7.29% over the past week as investors weighed fresh concerns about the company’s heavy spending and rising debt against still-bullish long-term growth expectations. The immediate pressure came from Morgan Stanley, which slashed its price target on Oracle by 30% to $213 and warned that the company’s aggressive buildout of AI cloud infrastructure could strain cash flow and earnings per share. The bank also highlighted Oracle’s swelling debt load – up from about $71 billion to roughly $105 billion in five years – and even advised clients to sell Oracle benchmark bonds in favor of credit default swaps, underscoring mounting credit-market unease.

At the same time, a competing narrative on Wall Street has kept enthusiasm for Oracle’s stock alive despite the recent 7.29% pullback. Guggenheim’s John Difucci reaffirmed a Buy rating and a striking $400 price target, calling Oracle a “decade stock” that could ultimately deliver exponential earnings growth as its AI and cloud infrastructure bets mature. Analysts overall remain broadly positive: the stock carries a Strong/Moderate Buy consensus and average price targets that suggest significant upside from current levels, indicating that many market participants see the current weakness as a pause rather than a peak.

Beyond AI infrastructure, Oracle’s strategic role in TikTok’s newly restructured U.S. operations has added a high-profile catalyst to the story, even if it wasn’t enough to offset this week’s selling. Under a long-awaited deal aimed at resolving U.S. national security concerns, TikTok has created a U.S.-led entity in which Oracle, along with Silver Lake and MGX, will own half of the American business. The agreement removes a major regulatory overhang for TikTok and positions Oracle at the center of a massive social-media and data-infrastructure partnership. For stock investors, the week’s 7.29% drop reflects short-term worries over leverage and funding costs, set against a backdrop of ambitious AI expansion and potentially transformative platform deals that could drive longer-term returns.