Oracle Shares Plummet 5.7% Amid Stalled Data Center Deal—What’s Next for the Tech Giant?

Summary
• Oracle (ORCL) plunges 5.73% intraday to $177.84, its lowest since late 2023.
• Blue Owl Capital exits $10B Michigan data center talks, citing debt and AI spending concerns.
• Oracle’s $248B in lease commitments and $124B debt load amplify investor fears.

Oracle’s stock has imploded amid a critical blow to its AI infrastructure ambitions. The tech giant’s shares are trading at their lowest level in over a year, driven by a stalled partnership with Blue Owl Capital for a $10 billion data center project. With Oracle’s debt load and lease obligations now under intense scrutiny, the market is recalibrating its risk profile. The stock’s sharp decline has triggered a cascade of options activity and leveraged ETF losses, signaling a shift in sentiment.

Blue Owl Exit Sparks Debt and AI Funding Fears
Oracle’s stock collapse stems from a critical development: Blue Owl Capital’s withdrawal from funding a $10 billion data center in Michigan, a cornerstone of Oracle’s AI infrastructure push. The Financial Times reported that Blue Owl balked at Oracle’s rising debt and aggressive AI spending, which now accounts for a significant portion of its capital allocation. Oracle’s $248 billion in lease commitments and $124 billion in total debt—revealed in its latest SEC filing—have intensified concerns about its financial sustainability. While Oracle insists the project remains 'on schedule' with a new equity partner, the loss of Blue Owl, its primary data center financier, has eroded investor confidence.

Options and ETFs in a Volatile Oracle Environment
• 200-day average: 213.15 (below current price); RSI: 44.48 (neutral); MACD: -12.09 (bearish divergence).
• Bollinger Bands: Price at $177.84, near the lower band ($181.97), suggesting oversold conditions.
• Kline pattern: Short-term bearish trend with a bullish engulfing candle, hinting at potential reversal.

Oracle’s technicals paint a mixed picture. The stock is trading near its 200-day moving average and within a long-term range, but the RSI and MACD signal bearish momentum. The Bollinger Bands indicate oversold conditions, which could attract short-term buyers. For options traders, two contracts stand out:

• ORCL20251226P170 (Put):
- Strike: $170; Expiry: 2025-12-26; IV: 44.24%; Delta: -0.2609; Theta: -0.0556; Gamma: 0.024995; Turnover: $1.19M.
- IV (Implied Volatility): Elevated, reflecting market uncertainty.
- Delta (Sensitivity to Price): Moderate bearish exposure.
- Theta (Time Decay): Low decay, suitable for short-term holds.
- Gamma (Delta Sensitivity): High, amplifying gains if price drops further.
- Turnover: Strong liquidity ensures easy entry/exit.
- Payoff: At a 5% downside (to $169), this put would yield $10.84 per contract, offering a 291% return on premium paid.
- Why it stands out: High gamma and moderate delta make it ideal for a short-term bearish bet with strong liquidity.

• ORCL20251226P175 (Put):
- Strike: $175; Expiry: 2025-12-26; IV: 42.79%; Delta: -0.4011; Theta: -0.0019; Gamma: 0.03074; Turnover: $880K.
- IV: Slightly lower but still robust.
- Delta: Strong bearish exposure.
- Theta: Near-zero decay, ideal for holding until expiry.
- Gamma: Very high, amplifying gains on price declines.
- Turnover: Sufficient liquidity for active trading.
- Payoff: At $169, this put would yield $6.84 per contract, a 236% return.
- Why it stands out: High gamma and near-zero theta make it a potent tool for a deeper correction.

For leveraged ETFs, Direxion Daily ORCL Bull 2X ETF (ORCU) and Defiance Daily Target 2X Long ORCL ETF (ORCX) are down 11% and 11.5%, respectively. These are best avoided in the current bearish climate. A short-term bearish strategy favors the two put options above, while a long-term hold near the 200-day average (213.15) could signal a reversal.

Backtest Oracle Stock Performance
Oracle (ORCL) has demonstrated resilience following a notable -6% intraday plunge in 2022, with backtest data showing favorable short-to-medium-term performance. The 3-Day win rate is 55.59%, the 10-Day win rate is 53.58%, and the 30-Day win rate is 59.89%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 7.00% over 59 days, suggesting that ORCL can recover from significant dips with moderate gains in the following weeks.

Oracle at a Crossroads: Watch for $170 Breakdown or Equity Partner News
Oracle’s stock is at a critical juncture, with its $170 level acting as a key support. A breakdown below this could trigger a deeper correction, while a rebound above the 200-day average (213.15) might signal a short-term bottom. Investors should monitor Oracle’s ability to secure a new equity partner for the Michigan data center and its debt management strategy. The sector leader, Amazon (AMZN), is down 0.2%, suggesting broader cloud sector caution. For now, the ORCL20251226P170 and ORCL20251226P175 puts offer the most compelling risk/reward profile in a volatile environment. Watch for $170 breakdown or equity partner news—Oracle’s next move could redefine its AI ambitions.