U.S. artificial‑intelligence stocks were largely in the red on Friday, extending a three‑day losing streak.
Oracle slipped more than 2% on Friday, Nvidia was essentially flat, Micron fell 3%, and CoreWeave declined about 1% as of 9:45 a.m. Eastern. Broadcom, fresh off a strong quarterly report, slid 9%.
Oracle’s shares tumbled Thursday, closing roughly 11% lower after the cloud‑software giant reported revenue that fell short of analyst estimates.
The drop in Oracle’s stock dragged other AI‑linked names lower, even as the broader market celebrated record highs. The Nasdaq Composite slipped 0.26% on Thursday, while the Dow Jones Industrial Average and the S&P 500 each posted fresh intraday highs.
Despite growing demand for AI‑driven infrastructure, Oracle delivered mixed results this week. Revenue came in at $16.06 billion, versus the $16.21 billion analysts had expected, according to LSEG data. The shortfall sparked renewed scrutiny of the company’s heavy reliance on debt to fund its AI‑cloud expansion.
Industry observers also flagged the “circular” nature of recent GPU‑related deals, where cloud providers, chip makers and AI startups are increasingly intertwined. This has raised concerns about pricing power and supply‑chain dependencies for firms that depend heavily on GPU capacity.
Morningstar equity analyst Luke Yang said, “Investor skepticism about AI’s upside and the circular GPU ecosystem may be overly punitive to key AI suppliers such as Oracle. The company remains a solid cloud provider with strong switching costs across its database, application and infrastructure portfolios.”
Nevertheless, Morningstar trimmed its fair‑value estimate for Oracle, lowering the wide‑moat target from $340 to $286 per share. The firm cited challenges in delivering the planned AI‑infrastructure capacity on schedule, forcing a downgrade of its long‑term earnings outlook. Despite the reduced target, Yang maintains that Oracle’s shares appear undervalued relative to their intrinsic worth.
From a strategic perspective, Oracle’s position highlights a broader tension in the AI market: the race to scale compute resources is capital‑intensive, and firms that can combine robust hardware partnerships with a differentiated software stack are better positioned to capture margin. While rivals such as Nvidia continue to dominate the GPU segment, software‑heavy players like Oracle must balance aggressive infrastructure spending with disciplined capital management to sustain growth.
Analysts will be watching next week’s earnings season closely for clues on whether Oracle can accelerate its AI‑cloud rollout without compromising financial stability, and how the broader sector’s valuation metrics adjust amid shifting investor sentiment toward tech versus more cyclical assets.
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