Oracle's Two-Faced Market: Record Data Center Spending Fuels a Stock Rally and Then a Selloff

Oracle's stock swings on AI promise vs. massive capex: $39.2B spent in 9 months, $50B planned for FY2026, as new data centers and energy deals fuel growth.

Oracle’s AI narrative has created a split-screen moment for investors. One day the stock leaps nearly 10% on the promise of massive new data center projects; the next day it gives back those gains as the bill for that expansion comes due. On Tuesday, shares dropped 4.7% to €202.95 after having surged 22.4% the prior week. The tug-of-war between growth potential and capital hunger is now the defining theme for the cloud giant.

A $56 Billion Campus and a Growing Energy Appetite

The rally on Monday was ignited by tangible infrastructure. Oracle held a groundbreaking ceremony for "The Saline Barn" campus in Saline Township, Michigan, with OpenAI CEO Sam Altman, Oracle executives, and Governor Gretchen Whitmer in attendance. The campus alone carries a $16 billion price tag and is part of a larger complex valued at $56 billion. The computing gear needed to power it could add another $30–$40 billion. Separately, Oracle is pursuing "Project Jupiter" in Doña Ana County, New Mexico, with bilingual outreach, aiming to serve large-scale AI workloads.

To secure the necessary energy for these facilities, Oracle has partnered with Bloom Energy on fuel cells. The potential capacity stands at 2.8 gigawatts, of which 1.2 GW are already under contract. For Oracle, reliable power is as strategic as the chips themselves.

On the chip side, Arm CEO Rene Haas revealed at Computex in Taipei on June 2 that Oracle is a key customer for Arm CPUs in AGI data centers. This move broadens Oracle’s hardware base beyond traditional x86 architectures, a critical advantage as compute capacity becomes the cloud’s bottleneck.

The Capital Squeeze: $39.2 Billion and Counting

The enthusiasm over infrastructure was tempered by Oracle’s escalating spending. In the first nine months of the current fiscal year, capital expenditures reached $39.2 billion, up sharply from $12.1 billion in the year-ago period. And Oracle has committed to roughly $50 billion in capex for fiscal 2026.

This spending spree creates a natural tension. New customers demand capacity before revenue and cash flow fully materialize. The situation was exacerbated by broader market sentiment after Alphabet announced a large stock sale to fund its own AI infrastructure.

Yet the stock’s technical picture remains bullish. On Monday, Oracle shares closed at $248.15, up 9.6%, after touching an intraday high of $250.25—the highest level of the year. Volume exploded to over 41 million shares, far above the daily average. The breakout above the 200-day moving average added technical momentum. On the options market, 617,000 Oracle contracts traded, more than double the norm, with a put/call ratio of 0.29 signaling strong call activity.

Ellison’s Wealth Surges—and So Do Analyst Targets

The rally lifted founder Larry Ellison’s fortune to roughly $302 billion, vaulting him past Jeff Bezos and into third place among the world’s richest people. Ellison controls about 40% of Oracle’s outstanding shares, so the stock move directly enriched him.

Analysts have responded not with caution but with higher targets. Scotiabank raised its price objective from $215 to $290, staying at "Sector Outperform." UBS bumped its target from $250 to $285 with a "Buy." BNP Paribas increased to $283 from $208, keeping an "Outperform" rating. Overall, 35% of analysts rate Oracle "Strong Buy," 47% "Buy," and 15% "Hold."

The operational numbers back the optimism. In the third quarter of fiscal 2026, revenue rose 22% to $17.2 billion, with cloud revenue jumping 44% to $8.9 billion. AI-related revenue surged 243%. Adjusted earnings per share came in at $1.79, above expectations.

The Next Inflection Point: Q4 Earnings on June 10

Oracle will report fourth-quarter results after the U.S. market close on June 10, with a conference call at 4:00 p.m. Central Time. Management guided for adjusted EPS of $1.96 to $2.00, while the consensus is $1.95 on revenue of roughly $19.09 billion. The backlog, which stood at $553 billion, will be a key metric.

The market will be watching whether growth can keep pace with the capital outlay required to sustain it. For now, Oracle remains a high-stakes AI bet, where every new data center is both a catalyst and a cost.