Why Oracle Stock Crashed -40%?
Oracle (ORCL)’s stock jolted down 37%, despite a modest revenue uptick and improved margins. Behind the dip: cautious Q2 earnings, shaken AI enthusiasm, analyst target cuts, and insider selling—all fueling a steep plunge in investor confidence. What’s really driving this rollercoaster?
Below is an analytical breakdown of stock movement into key contributing metrics.
| 10252025 | 1232026 | Change | |
|---|---|---|---|
| Stock Price ($) | 282.6 | 177.2 | -37.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 59,018.0 | 61,017.0 | 3.4% |
| Net Income Margin (%) | 21.1% | 25.3% | 19.9% |
| P/E Multiple | 64.2 | 32.9 | -48.8% |
| Shares Outstanding (Mil) | 2,826.0 | 2,864.0 | -1.3% |
| Cumulative Contribution | -37.3% |
So what is happening here? The stock dropped 37%, driven by a modest 3.4% revenue rise, a strong 20% margin boost, but a steep 49% drop in the P/E multiple. Here’s what’s behind these shifts…
Here Is Why Oracle Stock Moved
- Q2 FY26 Earnings: EPS beat, but raised capex and negative free cash flow prompted investor concern.
- AI Infrastructure Bet: Aggressive AI data center investments caused significant debt growth and balance sheet strain.
- Analyst Target Cuts: Multiple firms lowered price targets on AI strategy execution and valuation concerns.
- AI Market Sentiment: Concerns about an ‘AI bubble’ negatively impacted ORCL, leading to a 30.5% Q4 fall.
- Insider Stock Sales: Key executives sold shares in late October 2025, potentially signaling reduced confidence.
Our Current Assesment Of ORCL Stock
Opinion: We currently find ORCL stock relatively expensive. Why so? Have a look at the full story. Read Buy or Sell ORCL Stock to see what drives our current opinion.
Risk: A good way to gauge risk with Oracle is to check its declines during major market sell-offs. It plunged nearly 77% in the Dot-Com Bubble, 41% in the Global Financial Crisis, and about 40% during the Inflation Shock. Even the less severe downturns like the 2018 Correction and Covid pandemic saw drops close to 19% and 29%, respectively. Strong fundamentals matter, but when the market turns sour, Oracle still faces sizable sell-offs.
Think this decline in ORCL stock is a buying opportunity? Maybe it is, but single-stock investments can be quite risky. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.