Oracle’s 20% Plunge Proves What Micron Knew All Along: AI Demand Is About to Collapse

Key Points:

• Oracle's stock has dropped 20% in the past five days, erasing much of its gains from the previous year and halving its market cap to just over $500 billion amid concerns over its aggressive AI spending plans.
• The company beat Q4 2026 revenue expectations but shocked investors with plans to spend $70 billion on AI data center expansion, funded by raising $40 billion through new debt and equity, raising fears of overextension.
• Oracle's debt is approaching $100 billion, with declining cash reserves and stock dilution, prompting comparisons to the heavily leveraged CoreWeave and raising questions about its financial sustainability.
• In contrast, Micron is deleveraging aggressively by paying down debt and building cash reserves, positioning itself better for potential downturns in AI demand and cyclical memory price drops.
• The AI market faces uncertainty as compute costs plummet and efficiency improves, potentially reducing the need for massive data center investments, which could negatively impact companies like Oracle that are heavily betting on large-scale infrastructure expansion.