ORCL Stock 4% Fall Brings Technical Breakdown After Oracle Layoffs of Humans for AI
After a staggering 120% surge since April, Oracle shares stumble as technical and corporate developments raise questions about the rally...
Quick overview
- Oracle shares have surged 120% since April but recently fell 4% below the 20-day simple moving average, raising concerns about the sustainability of the rally.
- The company is laying off staff in its cloud division due to rising costs associated with AI infrastructure, with over 150 positions cut in the Seattle area.
- Despite the pullback, Oracle's recent AI-related contracts and partnerships, including a significant deal expected to generate over $30 billion annually, continue to drive market excitement.
- Traders are now focused on whether the stock can maintain support at $225 or if it will decline further towards $200.
After a staggering 120% surge since April, Oracle shares stumble as technical and corporate developments raise questions about the rally’s durability.
From Relentless Climb to Sharp Pullback
Oracle’s stock (ORCL) has been on an extraordinary run, climbing 120% from its April lows to reach $261—powered in large part by strong momentum and the 20-day simple moving average (SMA) acting as a persistent support line. However, today’s session broke that technical trend. ORCL fell 4% to close at $244.22, dipping decisively below the 20-day SMA which has been acting as support, for the first time in months.
Trading activity was heavy, with more than $2.18 billion worth of shares changing hands according to Polygon data. Over the past six months, insiders have made 44 open market trades—only two of them purchases, with the remaining 42 being sales.
ORCL Chart Daily – The 20 SMA Has Been Broken
Despite that selling pressure, the stock had managed to defy gravity until now. With the short-term uptrend breached, sellers are now eyeing $225—where the 50-day SMA lies—and potentially $200, which marked the high for 2024.
Layoffs in the Cloud Division
The pullback comes as Oracle trims staff in its high-profile cloud division amid rising costs tied to artificial intelligence (AI) infrastructure. According to sources, employees in the division were informed this week that their roles were being eliminated. Some cuts were attributed to performance, while the unit continues to hire in select areas.
In the Seattle region—a longtime operational hub—more than 150 positions have reportedly been cut. Tennessee now hosts more Oracle job postings than any other state, in line with the company’s move to Nashville announced last year.
AI Contracts and Market Excitement
Ironically, part of the fuel for Oracle’s massive rally came from bullish AI-related news. The company recently unveiled a significant new cloud services deal, with CEO Safra Catz telling investors that Oracle has signed agreements expected to generate over $30 billion annually by fiscal 2028.
Reports also emerged that OpenAI—the creator of ChatGPT—plans to lease substantial data center capacity from Oracle to support the Stargate Project, a multibillion-dollar AI partnership involving SoftBank, MGX, Oracle, and OpenAI. The initiative aims to secure around 4.5 gigawatts of new U.S. data center power, a scale far beyond public consumer needs, driven solely by the AI industry’s demand.
Outlook: While Oracle’s strategic AI partnerships remain a powerful long-term narrative, the technical breakdown below the 20-day SMA is the first clear sign of exhaustion in its recent rally. Traders will be watching closely to see if $225 holds as support—or if a deeper retracement toward $200 signals a more prolonged cooling-off period.
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