Oracle Stock Plummets as OpenAI Data Center Delays Push Timeline to 2028

Oracle shares took a nosedive following a brutal reality check—OpenAI's ambitious data center expansion just hit a three-year delay.

The AI Gold Rush Hits a Wall

Wall Street's favorite narrative—the unstoppable AI infrastructure boom—just got a major plot twist. Oracle, a key beneficiary of the cloud arms race, saw its stock slide after internal targets for a flagship AI data center project were quietly pushed from 2025 to 2028. That's not a minor schedule slip; it's a fundamental recalibration of growth expectations.

Supply Chains, Power, and Patience

The culprits? A familiar trio haunting every tech CEO's dreams: semiconductor shortages, astronomical power demands, and logistical nightmares in scaling hyperscale facilities. Building the physical backbone for the AI revolution is proving far harder than writing the code for it. The delay throws cold water on the near-term revenue projections that have fueled Oracle's recent valuation surge.

The Market's Sobering Moment

This isn't just an Oracle problem. It's a sector-wide signal. If a partner to a leader like OpenAI can't keep pace, it begs the question of how realistic those trillion-dollar AI market forecasts really are. The news triggered a classic 'shoot first, ask questions later' reaction from traders—a blunt reminder that in tech investing, promised futures often trade at a premium until the delivery date actually arrives.

So, the AI hardware party isn't canceled. It's just been postponed. The ambitious 2028 timeline sets a new horizon, turning what was a near-term catalyst into a long-term bet. For now, the market is pricing in the wait—and the growing realization that building the future is a lot messier than selling it.

Oracle faces pressure as delays trigger market reaction

Oracle’s slide came right after its newest earnings report, which reversed the momentum the company enjoyed earlier this year.

Shares had climbed for months as Oracle locked in multibillion-dollar data center deals, including the OpenAI agreement, and that rally briefly pushed Larry Ellison past Elon Musk as the world’s richest person. That streak ended this week when results landed below analyst expectations and the delays raised new questions about Oracle’s AI push.

Oracle’s cloud business still showed big growth. Fiscal second-quarter cloud revenue jumped 34% to $7.98 billion. Its infrastructure business ROSE 68% to $4.08 billion, but both numbers came in just under forecasts.

Oracle is now spending heavily on data centers to serve OpenAI, TikTok-owner ByteDance, and Meta. The scale of the build-out has pushed Oracle’s credit costs higher.

ICE Data Services said protecting Oracle’s debt for five years rose as much as 0.17 percentage point to 1.41 percentage point, the highest intraday level since April 2009.

Jacob Bourne, an analyst at Emarketer, said, “Oracle faces its own mounting scrutiny over a debt-fueled data center build-out and concentration risk amid questions over the outcome of AI spending uncertainty.

This revenue miss will likely exacerbate concerns among already cautious investors about its OpenAI deal and its aggressive AI spending.”

Oracle absorbs rising costs as investors look for faster payoff

Oracle’s remaining performance obligation reached $523 billion, well above the $519 billion analysts expected. Investors want to see that FLOW into revenue sooner rather than later. But Oracle’s cash burn increased this quarter, and free cash flow hit negative $10 billion. Bloomberg data shows the company’s total debt at around $106 billion. JP Morgan’s Mark Murphy wrote, “Investors continually seem to expect incremental cap ex to drive incremental revenue faster than the current reality.”

The delays add another LAYER of concern for markets still trying to price the risks around Oracle’s AI spending. Workers close to the data center projects said shortages of labor and materials forced the timeline change. These projects were originally meant to showcase Oracle’s ability to move fast in the AI race. Now the shift into 2028 adds pressure on both Oracle and OpenAI.

Clay Magouyrk said in a statement, “Oracle is very good at building and running high-performance and cost-efficient cloud data centers. Because our data centers are highly automated, we can build and run more of them.” The message was meant to reassure investors, but the stock kept falling as traders processed the cost load tied to Oracle’s expansion.

Oracle is trying to hold on to momentum in cloud computing while building some of the most expensive AI sites in the market.

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