A Retiree Who Bought 1,000 Oracle Shares at $39 Just Watched Microsoft Walk Away

Key Points:

• Microsoft is ending its contract to rent AI computing capacity from Oracle, citing that Oracle’s older-generation chips no longer meet its needs, causing Oracle’s stock to drop as much as 5.2% before recovering slightly.
• Oracle’s stock has fallen significantly from its peak of $328.33 in September 2025 to $116.10, a 64.6% decline, despite strong business growth with 30% revenue increase and a large backlog of signed contracts.
• The company’s aggressive spending on equipment and data centers, along with $167 billion in debt and expected cash burn through fiscal 2028, raises concerns about sustainability, especially with a large portion of its backlog concentrated in a single AI customer.
• For long-term shareholders, such as a retiree with a significant Oracle stake, a partial sale to reduce portfolio concentration while maintaining exposure and dividend income is a reasonable strategy to manage risk and liquidity.
• Analysts remain mostly positive on Oracle, with 35 out of 43 rating it a buy or strong buy and an average price target roughly double the current price, suggesting potential upside despite recent setbacks.