What Happened?
Shares of enterprise software giant Oracle (NYSE: ORCL) jumped 7.3% in the morning session after reports surfaced that TikTok's parent company, ByteDance, agreed to form a U.S. joint venture that would grant a group of American investors, led by Oracle, a controlling interest in the popular app's U.S. operations.
The move aimed to address U.S. national security concerns and prevent a ban of the short-video platform. Under the agreement, a new entity called TikTok US would be formed, with Oracle and partners Silver Lake and Abu Dhabi-based MGX owning the majority stake.
This deal positioned Oracle to handle U.S. data protection, algorithm security, and content moderation for the app. The news was seen as a significant win for Oracle's cloud business, securing TikTok as a key, high-margin customer and cementing the company's role as a major provider of cloud and data security services.
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What Is The Market Telling Us
Oracle’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 4.5% on the news that reports revealed that a critical $10 billion funding deal with Blue Owl Capital for a Michigan data center stalled.
While Oracle disputed the narrative, claiming they selected a different equity partner, the reported reason for Blue Owl's exit sparked widespread anxiety: concerns over Oracle's ballooning debt and "unfavorable" terms. This specific deal failure illuminated a massive structural risk: Oracle was aggressively leveraging its balance sheet to fund the AI race. Investors grew increasingly concerned that hyperscalers relied more on risky private equity structures to build infrastructure rather than using their own capital. The market fear was that Oracle overextended itself financially to chase OpenAI's demands.
Oracle is up 16.5% since the beginning of the year, but at $193.45 per share, it is still trading 41.1% below its 52-week high of $328.33 from September 2025. Investors who bought $1,000 worth of Oracle’s shares 5 years ago would now be looking at an investment worth $3,000.
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