- Oracle shares fell 16.5% over five sessions amid AI spending worries and layoffs.
- A potential Japanese sovereign cloud contract is emerging as a closely watched catalyst for Oracle’s cloud business.
- OpenAI, a key Oracle customer, is reportedly in funding discussions at a $1.2 trillion valuation, up 41%.
- Retail traders on Stocktwits remain extremely bullish on ORCL despite the recent sell-off.
Oracle Corp.’s shares extended their losing streak for a fifth straight session on Tuesday, falling about 16.5% over the period, even as retail traders on Stocktwits remained bullish on the beaten-down name. The decline has come amid renewed concerns over Oracle’s aggressive AI infrastructure spending and financing needs, while the company began another round of layoffs this week.
Employees posted termination emails on social media platforms including LinkedIn, Reddit, and Blind, with some saying they were informed early Tuesday. The cuts follow Oracle’s reduction of about 21,000 jobs, or 13% of its workforce, during its last fiscal year, which ended in May 2026.
Despite the pressure, ORCL’s retail sentiment on Stocktwits remained ‘extremely bullish’ for much of the past week, with traders looking for potential catalysts. One catalyst in focus is a potential sovereign cloud contract from Japan, as the Financial Times reported in July that Oracle was leading Amazon, Microsoft, and Google in the race to provide “air-gapped” cloud infrastructure for sensitive Japanese government data.
Traders are now watching for any confirmation of a deal, with some arguing a win could provide a meaningful boost to Oracle’s cloud narrative. Sentiment also received a lift from a fresh FT report that OpenAI, a major Oracle customer, is holding early discussions with investors over a private funding round at a valuation of about $1.2 trillion.
That would represent roughly a 41% increase from the $850 billion valuation attached to OpenAI’s March funding round. The potential fundraise could matter for Oracle because the company has been building massive data-center capacity tied to OpenAI and other AI customers.
Oracle’s first-quarter capital expenditures surged to $28.5 billion, while it expects fiscal 2027 capex of as much as $95 billion. A trader on Stocktwits said “$ORCL get ready for news confirming Japan selecting ORCL cloud for sovereign cloud contract.”
Traders also reacted to Chairman Larry Ellison’s move to cancel his planned sale of up to $7.5 billion company stock. Another trader wrote, “The problem with $ORCL is that Larry Ellison has already shown his intentions… He wants to sell 50M shares into the market. But he suddenly realized that the shares that were already depressed would fall even further if he did. So he cancelled the sale… But cancelling the trade doesn’t mean he’s changed his mind.”
On OpenAI’s potential IPO, a trader said, “OpenAI said last year they will come to market in fall 2026. Oracle shot to 250, but then they delayed and dropped back down. You will see this at 280 next year if Altman brings it to market.” OpenAI CEO Sam Altman said this week that a listing is unlikely before 2027.
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