Oracle Corporation’s shares have been navigating volatile territory, with recent developments presenting a complex picture for investors. The stock’s trajectory now hinges on a critical balancing act: can the company’s aggressive push into artificial intelligence infrastructure justify its substantial capital commitments, or will financial pressures overshadow its growth narrative?
The Cloud Revenue Anchor: TikTok Partnership Finalized
A significant factor contributing to recent price stability is the confirmed strategic partnership with TikTok. A consortium led by Oracle has formally agreed to acquire a stake in the video platform’s U.S. operations, with Oracle itself slated to hold approximately 15%. The transaction is scheduled for finalization on January 22, 2026.
Beyond the equity position, the core of the deal for Oracle is technological. TikTok has committed to a “take-or-pay” agreement, anchoring its business to the Oracle Cloud Infrastructure (OCI). This arrangement not only guarantees long-term revenue streams for Oracle’s cloud division but also alleviates market concerns about the potential loss of this high-profile anchor client for its AI-driven services.
Soaring Ambitions, Soaring Costs
Despite this positive strategic development, investor sentiment remains tempered by the aftermath of the latest quarterly report. Since reaching an all-time high near $345 in September, the equity has surrendered significant value. The primary catalyst for this sell-off was not operational performance but rather a shock from the expenditure side: management unveiled plans for capital investments (CapEx) totaling $50 billion for the 2026 fiscal year.
This figure substantially exceeded market expectations, raising immediate questions about balance sheet health. Unlike deep-pocketed rivals such as Microsoft or Amazon, Oracle is expected to fund this massive outlay through a heavier reliance on debt financing and its operating cash flow. This uncertainty has even sparked legal scrutiny, with law firms reportedly investigating potential class actions centered on whether the capital-intensive nature of Oracle’s AI contracts was adequately disclosed to shareholders.
Should investors sell immediately? Or is it worth buying Oracle?
On the revenue front, the trend remains robust. Cloud segment revenue surged 68% in the last reporting period, fueled by exceptionally high demand for GPU capacity.
Technical Levels and Forward Outlook
Closing at $197.99 on Friday, the stock now faces a key technical juncture. The $200 level represents a significant psychological and technical resistance point. A sustained breakout above this barrier could indicate that the recent phase of capitulation selling has concluded, potentially attracting value-oriented buyers back to the market.
Conversely, should the recovery attempt falter, support near $190 becomes the next focal point. A breach below this level would likely reignite selling pressure.
- Recent Close: $197.99 (+0.25%)
- Distance from 52-Week High: -29.47%
- 14-Day RSI: 69.3
The next concrete milestone for the market is the aforementioned January 22, 2026 date for the TikTok deal closure. In the interim, Oracle must demonstrate that its monumental investments can be converted into profitable growth swiftly enough to justify its current valuation, which remains elevated compared to historical averages.
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