Oracle Stock Faces Major Bearish Test at $135 Next Week as Selling Pressure Build Up

Quick overview

Oracle shares surged after strong earnings, but technical resistance and heavy AI spending continue to raise questions about the durability of the rebound.

Stock Rebounds After Prolonged Decline

Oracle shares staged a sharp recovery following months of sustained selling pressure. Since September 2025, the stock had lost roughly 60% of its value as investors grew concerned about aggressive spending on artificial intelligence infrastructure.

That narrative shifted after the latest earnings release, with the stock jumping around 10% at the open. The move reflects renewed confidence that Oracle’s investments may be starting to deliver results.

However, despite the bounce, the broader trend remains fragile. The stock is now approaching key resistance levels, and a sustained reversal has yet to be confirmed.

Strong Earnings Reignite Optimism

Oracle’s fiscal third-quarter 2026 results, covering the period ending February 28, exceeded expectations across several key metrics.

Revenue and earnings both came in ahead of forecasts, extending the company’s track record of outperforming analyst estimates. The results provided reassurance that demand for cloud services and AI-related infrastructure remains strong.

This earnings beat helped ease concerns that rising costs would outweigh near-term revenue growth. It also reinforced the broader market view that AI infrastructure remains one of the most powerful 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 at $170, sending ORCL back down below $164. A failure to push higher above the moving averages would shift attention toward the $100 area now, with further downside risk.

ORCL Chart Daily – The Highs Keep Getting Low

AI Infrastructure Strategy Gains Traction

Oracle has been steadily expanding its position in the AI ecosystem through large-scale investments in data center capacity.

The company is building out a global network of high-performance facilities designed to handle AI workloads. These centers are powered by advanced GPUs from NVIDIA, including its latest-generation processors used for training complex AI models.

Oracle’s role in the AI landscape has also been highlighted by its involvement in major initiatives, including participation in U.S.-backed projects aimed at strengthening AI infrastructure capabilities.

This positioning places Oracle alongside key players competing to support the next generation of cloud and AI computing.

Heavy Spending Raises Long-Term Questions

Despite the strong earnings performance, Oracle’s strategy comes with significant financial commitments. The company plans to invest roughly $50 billion in capital expenditures, primarily focused on expanding data centers and cloud infrastructure.

While these investments are intended to capture long-term growth, they also introduce risks. Rising costs could pressure margins, particularly if demand growth slows or becomes uneven.

This dynamic is becoming a central concern for investors across the tech sector, where capital intensity is increasing rapidly.

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%

Conclusion: Oracle’s latest earnings have provided a much-needed boost to investor confidence, confirming that demand for AI and cloud infrastructure remains robust. However, the path forward is not without challenges.

Heavy capital spending, margin pressures, and technical resistance levels all suggest that the recovery may take time to fully develop. While the long-term growth story remains intact, investors are likely to stay cautious until Oracle can demonstrate that strong demand can translate into sustained profitability.

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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