Why Oracle Stock Plunged More Than 12% This Week
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By Johnny Rice – Dec 12, 2025 at 2:46PM ESTKey PointsWhile Oracle topped Wall Street's earnings expectations, it fell short of revenue targets, and its surging capital expenditures are making shareholders uneasy.Broadcom added to the market's anxiety on Thursday with an earnings release showing its margins are contracting. These 10 Stocks Could Mint the Next Wave of Millionaires ›NYSE: ORCLOracleMarket Cap$567BToday's Changeangle-down(-4.53%) $9.00Current Price$189.85Price as of December 12, 2025 at 3:13 PM ETIs Oracle's spending getting out of hand?Shares of Oracle (ORCL 4.53%) are falling this week, down 12.9% as of 2:41 p.m. ET. on Friday. The drop comes as the S&P 500 and Nasdaq-100 lost 0.6% and 1.8%, respectively. Oracle reported mixed earnings on Wednesday for its second quarter, revealing that the company's artificial intelligence (AI) spending spree is rapidly accelerating. The report, along with Broadcom's earnings release the following day, was enough to reignite fears of an AI bubble. ExpandNYSE: ORCLOracleToday's Change(-4.53%) $-9.00Current Price$189.85Key Data PointsMarket Cap$567BDay's Range$185.99 - $197.8552wk Range$118.86 - $345.72Volume2.2MAvg Vol26MGross Margin74.29%Dividend Yield0.96% Oracle's capex came in well above targets Oracle reported earnings per share (EPS) of $2.26, handily beating Wall Street's target of $1.64. The earnings beat was overshadowed by Oracle's revenue miss, delivering $16.06 billion when $16.21 billion was expected, as well as the extreme growth in its AI investments. Oracle's capital expenditures (capex) clocked in at $12 billion for the quarter, up from just $4 billion in the same period last year. It was also 50% more than the Street was expecting. Investors are wondering just how sustainable the capex spend is for the company, given how much it is relying on expensive financing. Image source: Getty Images. Broadcom's report on Thursday did little to calm investor nerves; while it reported record revenue, the company's CEO, Hock Tan, said that its AI sales have lower gross margins than other parts of its business. Advertisement Oracle is taking on serious debt Oracle is selling a substantial amount of high-interest corporate bonds to fund its escalating capex. It's a seriously risky play that requires AI demand to continue to grow at a lightning pace. Any material weakness in that demand would be very bad news for the company and its shareholders. About the AuthorJohnny Rice is a contributing writer for The Motley Fool covering tech stocks. He previously contributed to various financial publications.TMFJohnnyRiceRead NextDec 12, 2025 •By Johnny RiceThe Biggest Risk to Your Portfolio Isn't Missing AI -- It's Holding These 2 Stocks When the Hype FadesDec 12, 2025 •By Bram BerkowitzWhy Shares of Oracle Are Sinking TodayDec 12, 2025 •By Daniel FoelberEven Though Oracle Fell After Earnings, I'd Still Rather Buy It in December Over Every "Magnificent Seven" Stock (Except One)Dec 12, 2025 •By Timothy GreenOracle Stock Just Tumbled: Here's One Reason WhyDec 12, 2025 •By Jose NajarroWhy Oracle Stock Dropped After the Company Reported a Massive Increase in RPODec 11, 2025 •By Timothy GreenOracle's Debt Balloons to $108 Billion as AI Spending Soars