Why Is Oracle’s Stock Dropping Amid Record-Breaking AI Growth?

Why Is Oracle’s Stock Dropping Amid Record-Breaking AI Growth? Trefis Team Fri, June 26, 2026 at 10:01 PM GMT+7 4 min read ORCL ORCL-PD CRM IBM AMZN Image by Cristian Ibarra from Pixabay. The company is chasing unprecedented AI demand with a striking investment plan, creating a clear choice between future growth and present-day execution risk.

Oracle (ORCL) just signed $67 billion in AI infrastructure contracts in a single quarter, swelling its backlog of future business to a steep $638 billion. Yet the stock has fallen 21.0% over the past month and trades about 53% below its 52-week high. This divergence suggests a notable disconnect between operational momentum and current market sentiment. You have a legacy tech giant showing rapid demand in the hottest corner of the market, but its stock is telling a story of deep investor skepticism. The practical question for you is whether this is a historic opportunity to buy into a large, contract-backed growth story, or if the market is right to be wary of the large price tag that comes with it.

To buy Oracle today, you are paying a clear premium for that growth story. The stock trades at a price-to-earnings ratio of 27.9, higher than the S&P 500's 24.4. On a sales basis, the premium is even starker: a price-to-sales ratio of 7.1, more than double the market's 3.3. Oracle currently trades at a valuation that implies investors are pricing in high expectations for future growth. You are paying up for the market's belief that Oracle can successfully turn its large backlog into a new era of sustained, high-speed growth. For this price to make sense, the company has to execute a monumental build-out of its cloud infrastructure and convert those contracts into real, profitable revenue without major delays or cost overruns. The price assumes the plan works.