Oracle jumped roughly 9% on Monday after D.A. Davidson upgraded the stock to Buy, giving battered Big Tech investors something they haven’t had in over a week: a reason to click the buy button. Microsoft added about 3%, Nvidia gained more than 2%, and Meta edged higher. Amazon, which triggered the worst of last week’s carnage, continued to slide.
The bounce comes after a brutal stretch that wiped more than $1 trillion from the combined market caps of Amazon, Microsoft, Nvidia, Meta, Alphabet, and Oracle. The catalyst wasn’t a mystery. During earnings season, the biggest companies in tech collectively told Wall Street they plan to spend somewhere north of $650 billion on AI infrastructure in 2026. Investors, who had been nervously tolerating the spending arms race, finally flinched.
Oracle’s Upgrade: The OpenAI Bet Gets a Second Look
The star of Monday’s session was Oracle, which popped more than 9% to around $156 after D.A. Davidson analyst Gil Luria upgraded the stock from Neutral to Buy, maintaining his $180 price target. That target implies roughly 26% upside from Friday’s close, and Luria’s thesis boils down to one name: OpenAI.
Oracle has been punished relentlessly since September, when shares hit $345 on the back of a $300 billion deal with OpenAI. Since then, the stock has cratered nearly 60%. The market’s logic was straightforward: if OpenAI can’t fund its obligations, Oracle’s massive data center buildout becomes a very expensive empty warehouse.
Luria thinks the pessimism has overshot. He argues that OpenAI has “corrected several missteps,” including refocusing on ChatGPT and its core frontier models, turning on advertising for monetization, and realigning with Nvidia, Microsoft, and Amazon rather than competing with them. The analyst also pointed out that OpenAI already has roughly $40 billion in cash and could raise another $100 billion by the end of the quarter. That’s enough to fund the data centers Oracle is building.
“Considering Oracle’s move from $345 intraday September 11 to the current $143 and subsequent moves down in Nvidia and Microsoft tied to OpenAI concerns, we believe the market has overshot to the downside,” Luria wrote. He added that Oracle’s core software business alone supports a valuation of 18x earnings, with Oracle Cloud Infrastructure representing “pure upside at this point.”
The TikTok Card Nobody’s Talking About
Buried in the D.A. Davidson note was another angle that hasn’t gotten enough attention: Oracle’s 15% stake in TikTok USA. The company generated an estimated $800 million in revenue from TikTok USA last year, and the arrangement could deepen into a broader cloud partnership with ByteDance. Vice President JD Vance previously pegged TikTok USA’s valuation at around $14 billion, suggesting Oracle may have acquired its stake at a bargain. D.A. Davidson estimates the TikTok position could be worth $5 billion to $9 billion in additional upside.
It’s a meaningful diversification play, even if investors remain fixated on the OpenAI narrative.
The $650 Billion Question Hanging Over Big Tech
Monday’s bounce was welcome, but it doesn’t resolve the core tension driving tech volatility: the sheer scale of AI capital expenditures.
Here are the numbers that spooked the market last week. Amazon, Alphabet, Microsoft, and Meta reported a combined $120 billion in capex for Q4 alone. Amazon’s 2026 guidance of $200 billion in capital spending was more than $50 billion above what analysts expected. Alphabet signaled it could more than double its capex. Microsoft’s fiscal 2026 spending is trending above its already massive $88.2 billion FY2025 total. Meta committed to spending “significantly higher” than its $70 billion 2025 budget.
Add it all up and the Big Five hyperscalers are on track to spend north of $650 billion on AI infrastructure this year. That’s more than the GDP of countries like Singapore, the United Arab Emirates, and Israel. Bank of America calculates that hyperscaler capex now consumes 94% of operating cash flows after dividends and buybacks, forcing companies into the debt markets. The Big Five raised $108 billion in bonds in 2025 alone.
The uncomfortable math: AI services currently generate only about $25 billion in direct revenue. That’s roughly 4% of what’s being spent on infrastructure. If monetization stalls, the write-downs would be historic.
Winners And Losers In Monday’s Session
Wall Street’s reaction to the spending spree hasn’t been uniform, which tells you something about how the market is starting to differentiate within Big Tech.
Oracle led the pack, buoyed by the D.A. Davidson upgrade and a growing sense that the OpenAI overhang may be easing. Microsoft, which had been dragged down by its own AI spending commitments, climbed about 3%. At 26x earnings, it’s trading at its lowest valuation since 2022, which is attracting value-oriented buyers. Nvidia added more than 2%, still riding CEO Jensen Huang’s Friday assertion that AI infrastructure demand remains “sky high.”
Amazon, the stock that lit the fire with its $200 billion capex bomb, continued to slip. D.A. Davidson didn’t just upgrade Oracle on Monday. The same firm had downgraded Amazon to Neutral on Friday, citing concerns about AWS losing its competitive lead and the risk that AI-powered chat interfaces could erode Amazon’s retail business. That’s a pointed contrast: one firm, two calls, same day, opposite directions.
Oracle’s Balance Sheet Problem Isn’t Going Away
Before anyone gets too euphoric about Oracle’s Monday pop, the financial reality deserves scrutiny. The company is carrying roughly $130 billion in debt and $248 billion in operating lease commitments. Free cash flow is negative. Oracle recently announced plans to raise $45 billion to $50 billion through a combination of debt and equity sales in 2026, including a $20 billion at-the-market stock offering and a $25 billion bond deal.
That’s an extraordinary amount of financing for a company betting that OpenAI’s checks will clear. Luria himself acknowledged the “precarious position,” even as he argued the stock was oversold. Oracle is essentially pulling years of data center investment forward, gambling that the $523 billion remaining performance obligation backlog will convert to real revenue before the debt burden becomes unmanageable.
The bull case says OCI revenue growth of 69% year-over-year proves demand is real. The bear case says negative free cash flow and a mountain of debt is a dangerous combination if OpenAI’s spending commitment wobbles.
What Comes Next For Tech Investors
Monday’s bounce is encouraging but it doesn’t mean the volatility is over. Nvidia’s February 25 earnings report looms as the next major catalyst. If Jensen Huang’s revenue guidance reflects the $600 billion-plus capex wave, expect another leg higher for AI infrastructure stocks. If it disappoints, the sell-off could resume with force.
The broader market is also flashing caution signals. Bank of America’s Global Equity Risk-Love indicator has jumped to the 95th percentile, a level the bank considers a bearish signal suggesting markets are overheated. That doesn’t necessarily mean a crash is coming, but it does suggest the easy gains are behind us for now.
The AI spending debate has shifted from “will companies invest?” to “will the investments pay off?” That’s a harder question, and the market is going to keep swinging violently as each earnings report either validates or undermines the $650 billion bet.
For Oracle specifically, the next few months are binary. If OpenAI closes its fundraising round and starts writing checks for those data centers, the stock has significant room to run. If OpenAI stumbles, Oracle’s leveraged bet becomes the most expensive “what if” in enterprise software history.
