A $300 Billion AI Bet Sunk This Mega-Cap Stock

Editor's note: One of the world's biggest AI companies is looking like a loser. As Vic Lederman of our corporate affiliate Chaikin Analytics explains, this mega-cap stock took a nosedive in the wake of a historic deal. In this piece, adapted from a recent issue of the free Chaikin PowerFeed e-letter, Vic breaks down why that happened... and what it could mean for the stock moving forward.

Tech giant Oracle (ORCL) seems to be one of the biggest "losers" of the AI boom right now...

Last September, the company announced a historic deal with OpenAI. The AI leader promised to purchase $300 billion in computing power from Oracle over the next five years.

At face value, the deal means that Oracle could stand to make an extra $60 billion in revenue every year – if OpenAI spends the money evenly.

For context, that would roughly double Oracle's current annual revenue, which was $57 billion in its most recent fiscal year.

Oracle's stock soared on the news of the deal... jumping 36% in one day in the wake of the announcement. The September rally pushed the stock to a new all-time high.

Now, I'm sure Oracle investors would have liked those gains to continue. But that hope didn't pan out...

By mid-December, the stock was down about 42% from its all-time high... And it's still roughly 45% below that level.

That's a painful wipeout, folks.

Investors have been afraid that Oracle is recklessly spending on its AI infrastructure build-out. And if Oracle is counting on the full $300 billion from OpenAI, that could be true...

Think about it for a moment...

OpenAI pledged $300 billion over five years to Oracle.

An insider at OpenAI claims that the company just reached $25 billion in annualized revenue at the end of February...

That means OpenAI pledged more than twice its annualized revenue to Oracle over those five years.

To be fair, OpenAI is still bringing in tons of money through private funding. It recently raised $122 billion to "accelerate the next phase of AI."

But that money won't always be available – especially if more folks get worried that OpenAI will struggle to monetize its products.

Of course, that leads to fear that OpenAI will break its promise to Oracle.

Like I said, Oracle's stock is now well below its highs. However, a recent jump in its share price might have investors expecting this weakness to end.

Unfortunately, the Power Gauge indicates this is probably just wishful thinking...

The Power Gauge Still Signals Caution on Oracle

Today, Oracle gets a "bearish" overall rating from the Power Gauge.

It isn't hard to see why...

The Power Gauge is a tool we use at Chaikin Analytics for analyzing the market. It gathers investment fundamentals and technicals into a simple rating of "bullish," "neutral," or "bearish."

Since the start of 2026, Oracle's stock has shed about 8% of its value. And it has spent most of this year with little support from the "smart money" on Wall Street.

To make matters worse, the stock has also dramatically underperformed the broad market S&P 500 Index since the start of the year.

Now, this setup doesn't look pretty. And the Power Gauge gives us more reasons to doubt a full-on turnaround right now...

Since Oracle started pulling back after the surge in September, our system has flashed nine individual "sell" alerts for the stock... the most recent of which was on April 14.

This "overbought sell" alert came after the stock soared by about 18% in less than a week. As you can see in the chart below, that rally pushed Oracle into overbought territory...

A similar alert from the Power Gauge happened on December 3. In less than a week, the stock had spiked about 12% from a recent intraday low – pushing it to overbought levels.

Oracle's stock continued to tick higher and deeper into overbought territory. Then, it crashed by about 20% within a week.

During the previous surge, Oracle had some support from the smart money – as shown in the chart above by the Chaikin Money flow indicator. This shows us when institutional investors are buying.

But as the chart also shows, smart-money activity has remained negative recently.

Put simply, Oracle's stock has posted an impressive rally. But it's looking like it has gone too far. And the Power Gauge is flashing clear signs of caution for the stock right now.

We'll have to see in the months and years ahead what happens with that $300 billion deal between Oracle and OpenAI. But for now, the deal has hurt Oracle's stock. And the pain might not be over yet.

Regards,

Vic Lederman

Editor's note: Two investing legends say a "dark chip crisis" could be about to unfold, creating unbearable losses for investors in America's favorite AI companies. But this comes with a silver lining... one they believe is the greatest wealth-creation opportunity in their combined 90 years of investing. On April 29, they'll reveal all the details, including the move that could make you 12 times your money.