Oracle shares drop on AI spending concerns and Microsoft criticism

Oracle Corporation shares fell 4.7% in morning trading Friday as a broad sell-off in AI infrastructure stocks wiped out much of the gains the company made after its Investor Day presentation earlier this week.

The decline followed Amazon's third-quarter earnings report, which missed both revenue and earnings estimates. Amazon said it plans to maintain capital expenditure of approximately $220 billion for 2026, raising investor concerns about the timeline for returns on large-scale AI spending.

Microsoft CEO Satya Nadella added pressure during his company's earnings call, criticizing AI cloud business models that rely heavily on a small number of large customers for most of their revenue. Market participants interpreted his comments as directed at Oracle and similar cloud providers. Oracle has faced questions about the concentration of its AI infrastructure contracts.

Scotiabank lowered its price target on Oracle to $205 from $215 on Friday. Morgan Stanley issued a note stating that the company now faces the challenge of execution, while maintaining a neutral rating on the stock.

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