Reviewed by Gotrade Internal Analyst
Jakarta, Gotrade News - Oracle’s recent stock plunge puts a spotlight on growing investor worries about massive AI capital expenditures. Negative sentiment peaked after a key partner reportedly pulled the plug on funding a new data center project.
Key Takeaways
- Oracle stock dropped to $192 after Blue Owl Capital reportedly backed out of data center funding.
- Momentum ETFs like QMOM are starting to sell off, while some value investors are buying the dip.
- Morningstar pegs fair value at $277 but advises caution due to high execution risk.
The tech stock has slid far from its all-time high of $328 in September as the market doubts its capital efficiency. Investors are starting to question the risks behind massive spending amidst the ongoing AI fever.
Big Money Moves
Morningstar data shows several ETFs dumping shares as the price momentum fades. Alpha Architect US Quantitative Momentum ETF (QMOM) sold over $5 million worth of holdings due to the shift in technical trends.
On the flip side, WisdomTree US Quality Growth ETF took advantage of the drop, scooping up $48 million in shares. Meanwhile, giant ETFs like SPDR S&P 500 ETF Trust are still holding massive positions worth $3.6 billion.
Valuation vs. Risk
Morningstar analysts estimate the fair value is actually at $277 per share. Technically, the current price screams "undervalued" and is trading deep below its fair price.
However, this discount doesn't automatically make it a safe buying opportunity for everyone. The uncertainty surrounding the final outcome of their data center infrastructure buildout creates a wide range of risks for shareholders.
Ryan Kirlin from Alpha Architect notes this situation is specific to the company's execution rather than a sign of a broader AI failure. He compares it to Palantir Technologies Inc., which is still trading at a sky-high sales valuation.
Entering this stock now is only recommended for investors with high risk tolerance or strong conviction in long-term AI execution. Volatility is predicted to remain high until there is new clarity on the company's infrastructure funding.
Reference:
- The Daily Upside, Here Are the Top ETFs Holding Oracle after Its Nosedive. Accessed on December 24, 2025
- Featured Image: Shutterstock
Disclaimer
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