Oracle Falls Nearly 5% on Nasdaq Despite Record Annual Results; 21,000 Job Cuts Reveal the Human Cost of AI Buildout

New York/Mumbai, June 23: Oracle Corporation’s shares fell nearly 5% on Monday on the Nasdaq, closing around $175, even as the software and cloud computing giant posted its best-ever annual results, a paradox that tells you everything about where markets are right now.  

The stock had been trading around $182 before the selloff, and the intraday chart showed a steep drop from just before 10 am New York time before grinding lower through the session, with a brief late-day spike before settling near $174–$175. The market’s message was blunt: record numbers are no longer enough when the bill for building the future is this large. 

The annual report, filed on Monday, revealed that Oracle’s total workforce fell to 141,000 full-time employees as of May 31, 2026, down from 162,000 a year earlier. That is 21,000 people, or 13% of its entire global workforce, gone in twelve months. The company’s own filing stated that the “deployment of AI technologies across our operations have resulted, and may continue to result, in reductions to our workforce.”  

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In plain language: The machines are replacing the people, and Oracle is saying so in its own regulatory filings. The company spent $1.84 billion in severance payments and other restructuring costs in fiscal 2026, nearly five times the $374 million it spent the year before. 

And yet the financials were genuinely extraordinary. Total revenues hit a record $67.4 billion for fiscal 2026, up 17%. Cloud revenues surged 39% to $34 billion, with cloud infrastructure, the AI data centre business nearly doubling, up 77% to $18.1 billion. The backlog, or remaining performance obligations, ballooned to $638 billion which is up a staggering 363% year on year and largely driven by prepaid AI contracts with customers including OpenAI and Meta. Most unusually, Oracle’s backlog now exceeds its own market capitalisation, meaning it theoretically has more contracted future revenue than its entire company is worth on the stock market. 

So why did the stock fall? Three reasons. First, free cash flow was negative $23.7 billion for the year: Oracle is spending far faster than it is generating cash, burning through capital at a pace that has made debt financing essential. The company raised $43 billion in debt and $5-billion in equity in fiscal 2026 alone, and plans to raise another $40 billion in fiscal 2027. Second, capital expenditure hit $55.7 billion for the year which is more than double the $21.2 billion of the previous year and Oracle has guided for net capex of $70 billion in its current fiscal year. Third, the restructuring charge of $1.84 billion was a jolt to the income statement that investors had not fully priced in. 

The Unusual Detail Worth Watching 

The most striking line in the entire filing is buried in the balance sheet: Oracle’s property, plant and equipment, which are essentially its data centres and physical infrastructure, grew from $43.5 billion to nearly $100 billion in a single year. The company essentially doubled its physical asset base in twelve months. That scale of construction, financed almost entirely by debt and customer prepayments from companies like OpenAI, is without precedent in the tech industry. Oracle’s $638-billion backlog also raises a quiet question: A significant chunk is tied to a handful of AI customers.  

For now, Oracle is betting everything on AI.  

Source

• Oracle Corporation Annual Report, FY2026 | Oracle Investor Relations, June 22, 2026