Key Takeaways
- Oracle stock has lost 30% YTD, closing at $137 on September 25 as the cost of financing its AI data center buildout climbed with Treasury yields above 5%.
- Oracle’s 5-year credit default swaps hit a record 221.78 basis points on September 24.
- Analysts hold 27 buys, 8 outperforms, 7 holds, and 1 sell, and their $238 mean target sits 74% above the price.
- TIKR’s mid-case model values Oracle at $454 by May 2031, a 231% total return.
Why Oracle Stock Has Fallen 30% in 2026 Despite Beating Earnings
Oracle (ORCL) stock has dropped 30% since early January, closing at $137 on Friday, September 25. The losses trace back to one question: who pays for the AI data centers Oracle has promised to build.
Operating results haven’t been the problem. Oracle posted fiscal Q4 adjusted EPS of $2.11 on June 10 against a $1.96 estimate. It then reported Q1 adjusted EPS of $1.92 on September 10, ahead of the $1.74 consensus. Yet the stock slid from a June peak near $248 to about $116 by late July.
The cost of financing the buildout explains that gap. In April, Oracle agreed to bear all energy costs for Project Jupiter, a 2.45-gigawatt New Mexico campus that Blue Owl unit STACK Infrastructure is building to serve OpenAI. Oracle also pays the debt costs on the project’s $18 billion of bank loans.
On September 24, Oracle sent Blue Owl a force majeure notice citing potential power delays. A person familiar with the deal said the project faces a one-year delay. Oracle stock fell 3.5% that day. Its 5-year credit default swaps (the price of insuring its debt against default) hit an all-time high.
Rates made the problem worse. The 10-year Treasury yield touched 5.22% on September 24, near its highest since 2007, after the Fed raised rates the week before. And lenders are repricing: Jupiter borrowed at about 6% a year ago, while new terms could run 8% or more.
The Street hasn’t followed the price down. Oracle stock carries 27 buys, 8 outperforms, 7 holds, and 1 sell, and the $238 mean target sits 74% above the close, even after falling from $347 in November 2025. Separately, 41 analysts publish a price target, and the lowest is $110.
The 30% slide prices in a funding squeeze while demand holds up. William Blair expects no hit to fiscal 2027, because Jupiter contributes no revenue this year.
TIKR Values Oracle Stock at $454, Well Above the Street’s $238
TIKR’s mid-case model values Oracle at $454 by May 2031, implying a 231% total return from the current price of $137, or 29% annualized over 4.7 years.
A 29% annual return sits far above what investors expect from a mature software franchise, which shows how much financing risk the $137 price already absorbs.
The market prices Oracle on Jupiter’s delay and 5% Treasury yields. The model gives more weight to the earnings beats than to the cost of funding the buildout.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
