Oracle Stock Analysis: Why AI Momentum Drove a Massive Rally Before the Recent Pullback

Oracle has been one of the technology sector’s, especially AI’s, biggest drivers in the second quarter of this year. This is largely due to Oracle’s important role in cloud computing and its robust infrastructure, which is considered an AI model production haven.

The company’s stock has recorded a 66% increase year-to-date, reaching $350 a share last September. However, Oracle’s stock has shed most of these gains since due to two factors:

  1. Fears of an AI bubble taking shape (similar to the dot-com bubble earlier this century).
  2. Fears of circular financing taking place among tech giants striking multi-billion investment deals between them. This heightens fears of the money keeping on circulating between said companies or several accounts, making the investments look bigger than they actually are.

In addition to all that, Oracle’s stock experienced another blow after the company released its Q2 2026 earnings report. Despite Oracle recording revenue growth last quarter, it still came in lower than the growth in expenses, which have risen significantly.

How a 438% RPO Jump Fueled Concerns of an AI Bubble

A certain line item was responsible for much of Oracle’s stock price drop: the remaining performance obligations (RPO), which amount to half a billion dollars, a 438% increase. And despite the fact that the growth in this particular line item is considered a good sign, it has ignited fears and concerns among investors about whether Oracle can deliver on its obligations, turn it into profit, and obtain the funding it needs.

All this led investors to ditch their Oracle shares, cueing the company’s market capitalization to lose $70 billion overnight.  As a result, Oracle stock dropped by 12% after trading hours in one of its worst-performing days in years.

This led to creating a wave of fear in the markets of a possible AI bubble forming, especially with doubts circling around regarding the ability of major tech companies to turn enormous AI-related spending into actual revenue and net profit.

Oracle’s earnings effect on major indices

Despite Oracle not being part of the Nasdaq 100 Index, its services are largely linked to big technology companies, which in turn are linked to AI. For example, OpenAI has struck a $300 billion deal with Oracle in return for the latter’s cloud computing solutions in the coming five years.

As for the Nasdaq’s future contracts, they have fallen by 0.8% today, while Nvidia’s stock price went down 1.74% in pre-market trading. This was due to Nvidia being the most exposed tech company to AI, as well as constituting 13% of the Nasdaq 100 on its own.

Intel, on the other hand, was considered one of 2025’s biggest winners, with its stock price doubling just before going back down for the following reasons: 

  • Facing a reduced EU antitrust fine.
  • New lawsuits regarding the use of unauthorized semiconductor chips.
  • Governance issues involving CEO Lip Bo Tan.

All this heightened market fears around AI, a scene Intel was hoping to remerge into the markets through by producing semiconductor chips, used in AI in particular.

Technical Analysis of Oracle Stock

Oracle’s real and sharp rally can be considered to have truly begun in 2020, when the stock was trading near $42, before rising rapidly toward the $345 level—an exceptional gain of 750% in just five years. However, over the past two months, the stock has started to decline, reaching current levels near $223 at the time of writing. This means the stock has dropped by approximately 30% during October and November 2025.

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This decline is the steepest compared to other major technology stocks, raising significant questions about the continuation of the bearish momentum and whether the reasons we outlined earlier in this report justify such pressure.

In general, the stock has a major support level near $170, and a break below this level—if it happens—would reinforce all the concerns discussed throughout this analysis.

Technical Outlook for the Nasdaq Index

As for the Nasdaq Index, which includes the largest technology companies, the attached chart shows that prices have recently stabilized within a sideways range, with support near 23,900 and resistance around 26,300.

This horizontal movement has continued since early September until today. We will closely watch how prices react around the upper boundary of this range, especially since the index is currently trading near its recent peak. It is also worth noting that the Nasdaq succeeded in recording its second-best weekly close during last week’s trading session.