Shares of Oracle (NYSE:ORCL | ORCL Price Prediction) are down 10% to $182.25 in early trading Thursday, following the company’s Q4 FY2026 earnings report released after the bell Wednesday. The slide is dragging on cloud and enterprise software names, with Salesforce (NYSE:CRM) stock down 1.28% to $168.80 and trading near its 52-week lows.
Oracle stock closed at $201.26 Wednesday, and the pre-market move would take it back to early-spring levels. Salesforce stock closed at $170.92 and is down 35% year to date, making it one of the weakest large-cap SaaS names of 2026.
The session caps a rough stretch for cloud-software stocks. The selloff carries different drivers for each name, and the nuances matter for anyone trying to read the tape.
Cloud Miss and $40 Billion Capital Raise Overshadow Oracle’s Beat
Oracle topped expectations on the headline numbers, posting EPS of $2.11 versus $1.97 expected on revenue of $19.18 billion versus $19.09 billion expected. However, Oracle’s total cloud revenue came in at $9.91 billion against $9.99 billion expected, missing estimates.
Within the cloud line, Cloud Applications landed at $4.13 billion, below the $4.17 billion expected, while Cloud Infrastructure hit $5.79 billion, above the $5.72 billion expected. Investors fixated on the application softness even as infrastructure showed strong AI training and inferencing demand.
The bigger issue is capital. Oracle announced plans to raise roughly $40 billion through a mix of debt and equity to fund its data-center buildout, signaling meaningful dilution and added leverage. Oracle’s free cash flow for FY2026 was deeply negative at -$23.7 billion against capital expenditures of $55.7 billion, with restructuring charges of $823 million on top.
On the bull side, Oracle reaffirmed its FY2027 revenue target of $90 billion and disclosed that remaining performance obligations jumped to $638 billion, well ahead of the $589.5 billion expected. That backlog reflects AI-driven cloud demand, anchored by a $300 billion, five-year deal with OpenAI signed in 2025.
Salesforce Slides on Broader Software Weakness
Salesforce stock is now down 36% over the past year, a stark contrast to Oracle’s longer-term resilience. The stock trades at a P/E ratio of 19x, reflecting compressed sentiment toward enterprise software despite generally healthy underlying numbers.
Salesforce’s own fundamentals have actually held up. The company beat in Q1 FY2027 on May 27, reporting EPS of $3.88 versus $3.13 expected on revenue of $11.13 billion, with Agentforce ARR climbing to $1.2 billion, up more than 200% YoY. However, the broader narrative around SaaS has turned harsher in recent weeks.
Software stocks have been under pressure partly on “SaaSpocalypse” fears, the worry that increasingly capable AI models could erode demand for traditional per-seat enterprise-software subscriptions. Reddit’s r/stocks community has amplified that thesis, with one widely upvoted thread titled “Salesforce stock is probably the worst to own right now and in the next 3 years” drawing more than 115 upvotes and 98 comments.
The two selloffs trace to different causes. Oracle stock is moving on its specific cloud miss and capital raise, while Salesforce stock is caught in a broader rotation out of SaaS names worried about AI disruption to seat-based revenue models. Conflating the two could lead investors to misread either setup.
What to Watch
Investors can watch for whether Oracle stock holds key support at $180 after the 10% drop and how Salesforce stock behaves near the 52-week low of $163.52 throughout the week. Analyst notes through Thursday could shift sentiment in either direction, particularly if sell-side desks recalibrate their views on Oracle’s capital intensity.
The Q1 FY2027 outlook from Oracle, calling for 58% to 64% cloud revenue growth, may keep the bull case alive if early dip buyers step in. Early-session price moves can shift fast, and the open could set the tone for the rest of the cloud complex.
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