Oracle's Stock Crash Has Cost Larry Ellison $213 Billion in 10 Months. Should Investors Buy the Dip?

2 months ago 10

Jeff Siegel, The Motley Fool

Thu, July 23, 2026 astatine 7:40 AM CDT 4 min read

Ten months ago, Oracle (NYSE: ORCL) looked unstoppable. The institution had go 1 of Wall Street's biggest AI winners arsenic investors stake its unreality infrastructure concern would play a cardinal relation successful powering AI workloads. The banal surged to grounds highs, concisely pushing co-founder Larry Ellison's nett worthy supra $400 billion.

Today, the communicative looks precise different. Oracle shares person fallen by much than 50% from their peak, wiping astir $213 cardinal from Ellison's idiosyncratic luck arsenic the marketplace has begun to question the company's assertive AI information halfway spending.

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The banal is present sitting astatine levels it hasn't seen since April 2025. So is this a bully buying opportunity?

Why Oracle fell

Demand for Oracle Cloud Infrastructure remains strong. The institution continues to motion ample infrastructure contracts and grow its information halfway capacity. In fact, its remaining show obligations reached a grounds $638 cardinal arsenic of May 31, the extremity of its fiscal 2026.

The occupation is that gathering AI information centers isn't cheap. Oracle dramatically accrued superior spending to grow its unreality infrastructure. Capital expenditures topped $21 cardinal successful fiscal 2026, up from astir $7 cardinal a twelvemonth earlier, and absorption says it expects to walk much than $25 cardinal successful fiscal 2027. That begs the question: Will those investments make charismatic returns rapidly capable to warrant these mounting costs?

Those concerns intensified aft S&P Global Ratings downgraded Oracle's recognition standing to BBB-, conscionable 1 notch supra junk status. That's not a trivial development, due to the fact that a little recognition standing translates into higher borrowing costs, which volition marque its already capital-intensive enlargement strategy adjacent much expensive. Investors are close to person concerns.

The semipermanent lawsuit remains intact

Despite the sell-off, Oracle's underlying concern hasn't abruptly broken. The unreality infrastructure portion remains 1 of the fastest-growing parts of the company, and request for AI computing capableness continues to outstrip proviso crossed overmuch of the industry.

Oracle has besides carved retired a unsocial competitory position. Rather than competing straight against Amazon Web Services, Microsoft Azure, and Alphabet's Google Cloud, Oracle progressively partners with them.

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