So, here's how you fund a $156 billion bet on artificial intelligence: you fire a lot of people. That's the stark math behind Oracle Corp. (ORCL)'s premarket stock gain on Wednesday, which followed news that the tech giant is slashing roughly 18% of its global workforce.
Employees reportedly got the news via email from "Oracle Leadership" at 6 a.m. on Tuesday, and their access to company systems was cut immediately. No warning, just a digital severance. It's a brutal but increasingly common playbook in the tech sector's pivot to AI.
The AI Cash Machine
Why the sudden bloodletting? It's all about redirecting cash. Analysts at TD Cowen estimate these cuts will free up between $8 billion and $10 billion in cash flow. That capital is desperately needed to fuel Oracle's massive AI data center expansion, a project with a projected price tag of $156 billion. The company recently reported a 95% jump in net income to $6.13 billion, but even that kind of profit isn't enough to cover this build-out on its own. You need to find the money somewhere, and payroll is a big, juicy line item.
The $553 Billion Question Mark
Oracle isn't just spending on a hope and a prayer, of course. It has what it calls a staggering $553 billion in "remaining performance obligations"—essentially, a backlog of contracted work it has promised to deliver. That number is up a jaw-dropping 325% from a year ago, and a lot of that growth is tied to one very famous client: a $300 billion deal with Microsoft (MSFT)-backed OpenAI.
Here's the multi-hundred-billion-dollar question: will that backlog actually convert into real revenue? Oracle hasn't provided a clear answer. To build the infrastructure needed to fulfill these obligations, the Austin-based company has already taken on $58 billion in new debt within just two months. And there are whispers that the financing might be getting tougher, with multiple U.S. banks reportedly pulling back from funding its data center projects. It's one thing to have a giant contract; it's another to actually build the multi-billion-dollar factories required to service it.
You're Not Alone
If this strategy sounds familiar, that's because it is. Oracle is following a path already blazed by other tech giants. Amazon.com Inc. (AMZN) and Meta Platforms Inc. (META) have also announced significant workforce reductions to reallocate resources toward their own AI ambitions. It seems the entire industry is deciding that the future belongs to data centers and chips, not necessarily to all the people currently on the payroll. Prediction markets on Kalshi show an 87% probability that tech layoffs in 2026 will exceed 2025 levels, suggesting this trend is far from over.
What the Charts Say
So, the stock is up on the layoff news. But where does it stand? Technically, Oracle is in a bit of a bind. It's trading 0.9% below its 20-day simple moving average and a more concerning 17.1% below its 100-day average. That keeps any near-term rebound attempt "boxed in," as the traders say, by a longer-term structure that's still bearish.
The stock is up a modest 3.64% over the past 12 months and is currently positioned much closer to its 52-week low of $118.86 than its high of $345.72. Momentum isn't giving a clear signal either. The Relative Strength Index (RSI) sits at 45.25, which is neutral territory—neither overbought nor oversold. The MACD indicator remains in negative territory and below its signal line, suggesting bearish pressure is still in play, premarket optimism notwithstanding.
For the chart watchers, key resistance to watch is at $165.50, while key support sits down at $138.50.
As of Wednesday's premarket session, Oracle shares were up 1.97% at $150.01.
