Oracle Corp (ORCL) is having a rough stretch. Shares dropped over 4% Wednesday morning after the Financial Times reported that Blue Owl Capital, Oracle's biggest data center partner, has decided to walk away from a massive $10 billion data center deal. The facility was earmarked for OpenAI, which makes the pullout particularly stinging.
Here's the problem: Oracle apparently hasn't lined up anyone to replace Blue Owl in backing the planned facility, according to people familiar with the situation. That's not great when you're trying to convince investors that your ambitious AI infrastructure buildout is worth the mountains of debt you're taking on.
And speaking of debt, that's become the central worry for Oracle investors. The stock has been sliding since the company reported disappointing second-quarter results last week. Revenue came in at $16.06 billion, missing the $16.21 billion that analysts expected. That earnings miss reignited concerns about whether Oracle's aggressive AI spending will actually pay off. The fear is pretty straightforward: what happens if AI demand doesn't meet expectations and Oracle is stuck with all this debt?
The Technical Picture Isn't Pretty
From a technical standpoint, Oracle is showing classic bearish signals. The stock is trading 12.3% below its 20-day simple moving average, 25.5% below its 50-day SMA, and 28.6% below its 100-day SMA. That's a clean sweep of red flags suggesting traders are headed for the exits.
The RSI sits at 32.48, which puts it in neutral territory but approaching oversold levels. That could signal a potential bounce if buyers show up, but given the fundamental headwinds, traders should probably stay cautious. The MACD is below its signal line, confirming bearish momentum in the short term.
Key support is sitting at $154.50, with resistance up at $216.50. If the stock tests that support level and holds, it might indicate a reversal is brewing. But if it breaks below? Expect more pain ahead.
Bottom line: the technical setup suggests Oracle will continue facing downward pressure unless something changes quickly. Traders might watch for potential rebounds near support, but right now the path of least resistance appears to be down.
ORCL Price Action: Oracle shares were down 4.70% at $179.67 at the time of publication on Wednesday.
