Can Orcl Stock Break Resistance and Recover After 60% Dive or Resume Decline After the Strong Earnings?

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Oracle shares saw a dramatic gain after a positive earnings report, after months of substantial declines brought on by market concerns over massive AI spending. The rally encounters technical difficulties, though.

Stock Rebounds After Prolonged Decline

Oracle stock has been under significant pressure since September 2025, losing roughly 60% of its market value during the extended downturn.

However, sentiment shifted on Wednesday as the shares opened about 10% higher following the company’s Q3 fiscal 2026 earnings release, which exceeded Wall Street expectations across several key metrics.

The results helped calm investor fears that heavy spending on artificial intelligence infrastructure would weigh too heavily on profits before demand begins to fully materialize. Despite the strong rebound, technical barriers remain significant, with the stock facing strong resistance overhead, making a sustained trend reversal uncertain for now.

Strong Earnings Beat Lifts Sentiment

Oracle’s quarterly results provided a clear signal that demand for cloud and AI infrastructure remains robust.

The company delivered better-than-expected revenue and earnings, extending its track record of beating analyst estimates across most major metrics. The results covered Oracle’s fiscal third quarter, which ended February 28.

The earnings surprise sparked renewed optimism among investors who had grown cautious during months of stock market volatility and concerns about aggressive capital spending.

The post-earnings rally also suggested that the broader market continues to view AI infrastructure as one of the most powerful growth drivers in the technology sector.

Technical Signals Reflect Deteriorating Sentiment

From a technical perspective, Oracle’s price action reinforces the fundamental unease. On longer-term charts, the stock has slipped below the 20 monthly moving average (gray) at $185 that previously acted as support and might turn into resistance. On shorter timeframes, rebounds have consistently failed near resistance levels, forming a clear pattern of lower highs, so we’ll see where this week’s rebound will end.

ORCL Chart Monthly – Can the 20 SMA Is Under Attack

On the daily chart we saw a rebound off the 200 SMA (purple) in early January but the 50 SMA (yellow) rejected the price and now the 200 SMA has been broken. However, the 20 SMA (gray) which was acting as resistance and pushing the stock lower has been broken But buyers failed again at the 50 daily SMA today at %170, sending ORCL back down to $165. A failure to push higher above the 50 SMA would shift attention toward the $100 area now, with further downside risk.

ORCL Chart Daily – The Highs Keep Getting Low

AI Infrastructure Strategy Gains Momentum

Oracle has increasingly positioned itself as a major player in the artificial intelligence ecosystem.

The company has invested heavily in expanding its global network of data centers designed to support high-performance computing and AI workloads. These facilities are powered by thousands of advanced GPUs from Nvidia, including the powerful H100, H200, and Blackwell processors used to train large AI models.

Oracle’s growing role in AI infrastructure was further highlighted when it was identified by the U.S. government as a central participant in the Stargate AI initiative last year.

Massive Spending Raises Long-Term Questions

Despite the strong results, Oracle’s strategy comes with substantial financial commitments.

The company plans to spend roughly $50 billion on capital expenditures, primarily aimed at expanding data centers and scaling cloud infrastructure capable of supporting AI-driven computing.

While these investments position Oracle to benefit from the long-term growth of artificial intelligence, they also highlight how expensive the global AI infrastructure race has become.

Balancing Growth and Profitability

Looking ahead, investors will closely monitor whether Oracle can maintain its strong growth trajectory while managing the financial pressure created by massive infrastructure spending.

The latest earnings report shows that demand for AI services remains strong, but sustaining profitability while continuing to expand data center capacity will remain one of the company’s biggest challenges in the years ahead.[

Strong Earnings and Revenue Beat

• Earnings Per Share (EPS): $1.79 vs. $1.70 expected
• Total Revenue: $17.19 billion vs. $16.91 billion forecast
• Year-over-Year Revenue Growth: 22%
• Net Income: $3.72 billion, up from $2.94 billion a year earlier

The results reflect strong demand across Oracle’s cloud services and enterprise software platforms.

Growth momentum continues to accelerate as enterprises expand cloud workloads and AI-driven computing infrastructure.

Cloud Business Drives Growth

• Total Cloud Revenue: $8.9 billion (including SaaS and infrastructure)
• Cloud Infrastructure Revenue: $4.9 billion vs. $4.74 billion expected

Key highlights:

• Cloud infrastructure revenue surged 84% year-over-year, accelerating from 68% growth in the previous quarter.
• Demand is being fueled by AI workloads, enterprise migrations, and large-scale data processing needs.
• Oracle’s cloud infrastructure platform is increasingly competing with major hyperscalers in high-performance computing and AI training environments.

Massive Capital Investment in AI Infrastructure

• Oracle continues to aggressively expand its data center footprint.

Key figures:

Capital Expenditures:

• Jumped 269% year-over-year in the first quarter
• Reached $8.5 billion during the period
• Full-Year CapEx Forecast: $50 billion

The spending reflects Oracle’s strategy to scale AI infrastructure, cloud capacity, and high-performance data centers globally. Large investments are aimed at supporting growing enterprise demand for AI model training and cloud computing services.

Record Backlog Signals Strong Future Demand

• Oracle reported a massive backlog of $553 billion.
• Key implications:
• The backlog is more than four times higher than a year ago.
• It reflects long-term enterprise cloud contracts and AI infrastructure agreements.
• The pipeline suggests strong revenue visibility over multiple years.

Fiscal 2027 Forecast

• Oracle now expects $90 billion in total revenue.

Fiscal 2026 Outlook

• Revenue Forecast: $67 billion (unchanged)
• Capital Expenditure Plan: $50 billion (unchanged)

Q4 2026 Guidance

Total Revenue Growth: 19%–21% year-over-year

Cloud Revenue Growth: Approximately 46%

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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