Amid the collective correction of technology stocks, Oracle has become the most prominent “disaster area.” As of November 14, the stock price of this software giant has fallen for five consecutive trading days, with a decline of more than 25% from its September high, erasing a market value of over $180 billion. The AI and cloud business aura that once supported its stock price is fading rapidly.
The “explosion” of profit data is the core reason for the stock price decline. A leaked internal financial report shows that the gross profit margin of Oracle’s cloud business is only about 14%, far lower than Amazon AWS (over 30%) and Microsoft Azure (about 28%), and even lower than the industry average of 20%. This data has completely shattered market expectations for high profits from its AI infrastructure business. Previously, relying on its cooperation with NVIDIA, Oracle was regarded as an important participant in the AI computing power market, and its stock price thus obtained a valuation premium.
Internal management issues have further heightened investor concerns. It is reported that Oracle has recently experienced multiple insider stock sales, with company executives reducing their holdings by more than $1 billion in total at the high stock price level. This behavior has been interpreted by the market as a lack of confidence in the company’s own business prospects. At the same time, the problem of customer churn has begun to emerge. Some large enterprises have chosen to migrate their cloud businesses to Amazon or Microsoft platforms due to high service prices and insufficient technical support.
External competitive pressure is also continuing to escalate. Amazon AWS recently launched dedicated servers for AI training, priced 30% lower than similar products from Oracle. Microsoft has deeply integrated Azure with OpenAI’s GPT-5.1 series, forming a differentiated advantage in AI application scenarios. In contrast, Oracle’s cloud business still focuses on traditional enterprise-level services, with limited actual results in the AI field, making it difficult to support high valuations.
However, some analysts still hold a cautiously optimistic attitude. Mark Murphy, an analyst at JPMorgan Chase, believes that Oracle is in the early stage of business transformation. The low gross profit margin of its cloud business is due to large early infrastructure investments, and profit levels are expected to gradually improve as economies of scale emerge. “If the company can prove the improvement in cloud business profitability in the first quarter 2026 financial report, the stock price may usher in a recovery opportunity,” Murphy said. But for now, investors are clearly more willing to vote with their feet, and Oracle’s “road to redemption” is still long.
