Oracle Stock is Selling Off After Risky AI Bet

December 15, 2025

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Happy Monday!

This week, Oracle shares tanked over 12% despite posting their best earnings quarter ever. Also, top dividend growth stocks raised payments like Mastercard, Broadcom, Eli Lilly, and more.

Your Monday Topics:

  • Oracle Stock Analysis

  • Dividend Raises This Week

The Key Story

Oracle Stock is Selling Off After Risky A.I. Bet

Oracle stock took a hit this week, dropping roughly 12.5% following its latest earnings report. After a massive 36% run-up last quarter, shares have now cooled off significantly (down ~32% from recent highs).

While the company posted record earnings, the market is getting jittery. The sell-off is being pointed to as a potential sign of an "AI Bubble" popping, specifically regarding Oracle’s massive, debt-funded bet on OpenAI.

Here is the breakdown of the earnings, the risks, and my take on the stock.

The Good: Explosive Growth in the Pipeline Despite the stock drop, the headline numbers were strong.

  • Record Earnings: Non-GAAP EPS hit $2.26, the highest quarter ever.

  • Cloud is Booming: Cloud Infrastructure revenue grew 68% YoY, and total Cloud revenue now makes up half of Oracle’s total revenue.

  • RPO Surge: Remaining Performance Obligations (booked future revenue) jumped to $523 billion. That is a nearly $70 billion increase in just one quarter.

The Bad: The Cost of Doing Business The market’s concern isn't about demand; it’s about the cost to service that demand.

  • CapEx Explosion: Capital expenditures hit $12 billion this quarter. For context, Oracle used to spend $1-2 billion per quarter.

  • Negative Free Cash Flow: Because of this spending, Free Cash Flow is deeply negative.

  • Mounting Debt: Unlike Google or Microsoft, Oracle is funding this buildout with debt. Total debt has reached $124.3 billion—an increase of nearly $40 billion over the past year.

The "OpenAI" Risk Factor The core controversy surrounds Oracle’s relationship with OpenAI (the creator of ChatGPT). A massive portion of Oracle’s future revenue relies on the "Stargate" project and OpenAI’s ability to pay.

  • The Bear Case: OpenAI is growing revenue but is deeply unprofitable. Investors are asking: Can OpenAI actually pay out $300B+ in the future? If the AI bubble bursts, Oracle is left holding the bag with massive debt.

  • Management’s Defense: Oracle’s CEOs argue that even if OpenAI falters, the infrastructure is standard. The data centers and chips can be repurposed for other customers (like Meta) because the demand for compute is industry-wide, not just specific to one company.

My Take: Is Oracle a Buy? The sentiment right now feels too negative. While the debt load is a legitimate risk, the growth trend in AI infrastructure is real and in the early innings.

  • Valuation: The sell-off has brought the price closer to fair value.

  • Yield: The drop has pushed the dividend yield back over 1%.

  • Outlook: While Free Cash Flow will likely remain negative for 2-3 years during this buildout, the long-term demand for data center infrastructure is undeniable.

If you believe in the multi-decade growth of AI, Oracle’s dip might be an opportunity—just keep a close eye on that debt pile.

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Dividend News

🚀 Dividend Raises This Month

  • LLY - Eli Lilly raises dividend by 15% to $1.73

  • MA - Mastercard raises dividend by 14.5%

  • AVGO - Broadcom raises dividend by 10% to $0.65

  • WDFC - WD-40 raises dividend by 8.5% to $1.02

  • FERG - Ferguson Enterprises raises dividend by 7.2% to $0.89

  • ABT - Abbott Laboratories raises dividend by 7%

  • ERIE - Erie Indemnity raises dividend by 7%

  • AMGN - Amgen raises dividend by 6%

  • ZTS - Zoetis raises dividend by 6% to $0.53

  • EIX - Edison International raises dividend by 6% to $0.8775

  • CNP - CenterPoint Energy raises dividend by 5% to $0.23

  • SYK - Stryker raises dividend by 4.8% to $0.88

  • FBIN - Fortune Brands Innovations raises dividend by 4% to $0.26

  • EPRT - Essential Properties raises dividend by 3%

  • TTC - Toro raises dividend by 2.6%

  • BMY - Bristol-Myers Squibb raises dividend by 1.6%

  • VAC - Marriott Vacations raises dividend by 1.3%

  • O - Realty Income raises dividend by 0.2%

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That’s it for this week’s update. If you want to follow along in real time, analyze these tickers, or track your own portfolio, jump into DividendData.com. You’ll also find our Discord community and my AI research tool there. Hit reply and tell me what you’re buying—I may feature a few notes next week.

đź“… Keep Investing. Stay informed.

– Zach
Founder, Dividend Data

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Disclaimer: Dividend Dividend (Dividend Data LLC) is not a professional financial service. All materials released from Dividend Data (Dividend Data LLC) are for educational and entertainment purposes. Dividend Data (Dividend Data LLC) is not a replacement for a professional's opinion. Contributors to the Dividend Data (Dividend Data LLC) might have equities mentioned in the newsletter