Oracle slides 5% to $120 as tech selloff deepens on AI concerns

Oracle Corp. fell 5% to $120.43 on Monday, erasing about $18 billion in market value as technology stocks extended a selloff driven by concerns over AI spending returns and rising oil prices.

"The market is repricing AI beneficiaries as investors question the timeline for returns on massive capital expenditure," said VK Vijayakumar, chief investment strategist at Geojit Investments.

The broader market showed mixed signals. The S&P 500 rose 0.3% while the Dow Jones Industrial Average slipped 92 points, or 0.2%. The Nasdaq Composite added 0.5%, buoyed by gains in Nvidia and Advanced Micro Devices. AMD climbed 3% after announcing an expanded partnership with Microsoft for its Helios AI product. Oil prices added to macro uncertainty, with Brent crude jumping 3.1% to $90.87 a barrel as escalating US-Iran hostilities threatened shipments through the Strait of Hormuz.

Oracle's decline brings its year-to-date losses to about 35%, making it one of the worst performers among large-cap software stocks. The selloff comes ahead of a packed week of earnings from major technology companies, including Alphabet, which reports Wednesday and will offer fresh insight into AI monetization trends.

The move in Oracle was part of a broader rotation out of enterprise software names that have underperformed the AI-driven rally in semiconductors and infrastructure. Salesforce, another cloud software giant, has lost about 35% this year and trades at $170.77, while Dell Technologies has surged more than 240% year-to-date on AI server demand. The divergence highlights a market rewarding hardware and infrastructure plays tied directly to AI capital expenditure while punishing software names where the payoff from AI integration remains uncertain.

Oil's rally above $90 a barrel added a macro headwind for equities, stoking inflation concerns that could delay interest rate cuts. Brent crude has risen nearly 16% over the past week, its biggest weekly gain since April, as the conflict between the US and Iran disrupts crude flows through the Strait of Hormuz. Asian markets traded cautiously Monday, tracking the oil-driven uncertainty, while investors also braced for technology earnings that could test confidence in the AI-driven market rally.

This article is for informational purposes only and does not constitute investment advice.