Oracle ran up hard into late 2024 on AI and cloud optimism, pushing valuation well above its historical range. As rates stay higher for longer, the market is rotating out of expensive AI-adjacent names and back toward near-term cash flow certainty.
At the same time, Oracle's cloud growth narrative is under scrutiny. OCI is growing, but not fast enough to justify premium multiples versus hyperscalers like AWS and Azure. Any hint of slower bookings, margin pressure from data center spend, or conservative guidance has been enough to trigger derisking.