Oracle Crashed 67% From Its Peak, Has It Become the AI Buy of the Decade?

Looking at what is happening with ORCL 0.00%↑ gives me the view into the future, and what can and will happen to the most overvalued AI stocks.

It all started on September 10, 2025, when Oracle signed a monumental cloud computing contract worth $300 billion with OpenAI, causing Oracle’s stock to skyrocket by roughly 36% to 40% in a single day!

Even before signing that deal, Oracle stock price had big jumps after announcing deals with NVDA 0.00%↑ and OpenAI which also moved stock around +100% over the year..

All of these jumps were very unusual to me and served as a clear sign that something unnatural was happening, causing my sixth sense to activate and scream “WARNING.”

I didn’t even have to wait long to confirm my concerns. The stock started dropping aggressively from its all-time high, eventually hitting a 52-week low and returning to price levels not seen since early 2024.

So basically we were back where we were before any of the exciting deals were announced. Do I even have to mention that I was calling it out on my X and suggesting to people that they should take profits and reduce the risk, same like Im doing now with MU 0.00%↑, INTC 0.00%↑, TSLA 0.00%↑, SPCX 0.00%↑.

As you might expect, the reactions were exactly the same: people told me I was just “late to the party,” or that I was crying because I didn’t own shares.

But the truth is, this never even crosses my mind. I do not evaluate whether an investment is good or bad based on how much the stock price went up or down; I evaluate it based on the data available at the moment I chose to buy or pass on it. Clearly, in the previously mentioned cases, I did not think they were good investments, and I still hold that exact same opinion today.

For example MU 0.00%↑ should have been bought when Mohnish Pabrai was calling it one of the best tech play, and when the stock was below $100. The same Mohnish who later got criticized for his fund performance and called “scammer” or a “clown investor”.

Oracle is a major enterprise software, database, and AI infrastructure company undergoing a high-stakes transformation driven by AI demand.

Currently, cloud infrastructure is the largest and fastest-growing segment of the business. It generates 27% of total revenue and is growing at a rate of 77% year-over-year. This places it ahead of the cloud applications segment, which accounts for roughly 24% of total revenue and is growing at a significantly slower rate of 11% year-over-year. Together, these two segments make up 51% of the company’s total revenue.

This shows us a clear direction in which the company is moving and highlights the previously mentioned “high-stakes” transformation.

Software used to be the main source of income, accounting for 36% of total revenue, but it is now declining at a rate of 1% year-over-year.

The other two business segments are services and hardware. Services contribute 8.5% of total revenue and are growing at 10% year-over-year, while hardware contributes 4.6% and is growing at 5% year-over-year.