Oracle: Funding AI Capacity With Layoffs

Julia Ostian5.49K FollowersFollow5ShareSavePlay(10min)Comments(2)SummaryOracle faces heightened risk as it pursues aggressive AI-driven cloud growth, funding $50B CapEx with significant layoffs and increased leverage.Q3 2026 delivered 20% revenue growth and a 44% cloud segment surge, but profit margins contracted and free cash flow turned sharply negative.Layoffs impacting up to 18% of the workforce raise concerns about operational stability and management's strategic judgment amid a $22B YTD cash deficit.Despite a valuation reset to 22x earnings, unresolved risks around OpenAI exposure, debt, and cash burn preclude a bullish or long-term leadership view. Mesut Dogan/iStock Editorial via Getty Images Introduction Even though Oracle Corporation (ORCL) has been selling off at the end of 2025, it did not stop the stock of this company from falling another 25% in 2026, bringing it to a levelThis article was written byJulia Ostian5.49K FollowersFollowI write about stocks I’m personally interested in adding to my portfolio. I’m not a professional advisor, but I study business and economics and analyze markets full-time. My writing is meant for both complete beginners — I avoid unnecessary complexity — and advanced readers, as I always aim to offer a distinct and well-reasoned perspective.I also run a YouTube Channel called "The Market Monkeys" and break some of the stocks there as well.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.