Oracle (ORCL 2.46%) shares declined by 5.8% as of 11:30 a.m this morning. The stock is now down more than 28% this year as of the time of writing.
Why is Oracle stock declining in 2026
There's little doubt as to the reason for the declines. It comes down to the bond and equity markets stressing Oracle's ability to fund its AI-related spending commitments, and its reliance on the loss-making OpenAI for its future revenue.
Image source: Getty Images.
While all the hyperscalers have come under pressure this year after revealing mammoth spending commitments. It's noticeable that the two with the heaviest exposure to OpenAI, Oracle, and, in turn, Microsoft, have both been hit hard. Meanwhile, Alphabet's limited exposure and its ability to fund its investments have led it to outperform.
The fears over Oracle have built up as its free cash flow and capital spending are moving in dramatically different directions.
ORCL Free Cash Flow data by YCharts
The latest speculation piles pressure on
As recently discussed, Oracle stock fell sharply after newsflow suggested Nvidia would commit only $30 billion to OpenAI's latest funding round, compared to the $100 billion market watchers had previously expected.
Still, that was last week's news. Over the weekend, The Information reported that the Stargate project (a joint venture including Oracle, OpenAI, and Softbank) announced last year, had stalled over ongoing disputes over the structure of the project.
Consequently, Oracle and OpenAI signed a $300 billioin deal in the Autumn, and Oracle shares have been under significant pressure since then. As such, the latest reports are only fanning the flames of uncertainty, and until OpenAI can convince the market that it can raise funding easily, Oracle stock is likely to be under pressure.
