Oracle Corporation (NYSE:ORCL) saw its stock decline on Wednesday morning after news broke that one of its key partners has backed out of a significant data center agreement.
Key details: According to a report from Financial Times, Blue Owl Capital, the largest data center partner for Oracle, announced its decision to withdraw from a $10 billion deal intended for a future data center.
This development is particularly troubling for Oracle, especially as concerns mount regarding its escalating debt and the hefty investments in artificial intelligence. As of now, the company hasn’t secured an alternative partner to fill Blue Owl’s role for the upcoming facility, sources indicate.
Oracle’s stock has been on a downward trajectory since the release of its mixed second-quarter results last week. The quarterly revenue was reported at $16.06 billion, falling short of the expected $16.21 billion, which has raised renewed worries about the company’s growing expenses related to AI. Investors seem apprehensive that the tech giant might struggle to manage its debt if AI demand doesn’t meet forecasts.
Analysis of ORCL: The stock is currently trading beneath major moving averages, facing significant bearish pressure. It stands at 12.3% lower than its 20-day SMA, 25.5% below the 50-day SMA, and 28.6% under the 100-day SMA—indicating a difficult environment for traders.
The Relative Strength Index (RSI) is sitting at 32.48, which suggests that the stock is in a neutral state but may be oversold. This condition could signal a potential rebound if buying interest resurfaces, though traders should proceed with caution. The MACD, falling below the signal line, points to bearish momentum in the near term.
Major support is positioned at $154.50, while resistance is noted at $216.50. A test of the support level that holds could indicate a potential reversal, though a drop below might lead to further declines.
Traders should remain aware of possible rebounds near support levels, but the prevailing bearish signs suggest exercising caution in the immediate future. The technical indicators imply that without a robust reversal, the stock may continue to face downward pressure.
Current ORCL price action: As of Wednesday morning, Oracle’s stock had decreased by 4.70%, trading at $179.67, according to Benzinga Pro.
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This content has been partially created using AI tools, though it has been reviewed and published by editors.
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