Why Oracle Stock Is Plummeting Today

Core Insights - Oracle's shares experienced a significant decline of 14.2% as of 2:45 p.m. ET, with a peak drop of 15.5% earlier in the day, coinciding with broader market losses in the S&P 500 and Nasdaq Composite [1] - The release of the Chinese AI model DeepSeek R1, which competes with U.S. models at a fraction of the cost, has raised concerns among investors regarding the future demand for data centers operated by companies like Oracle [2][3] Group 1: Impact of DeepSeek - DeepSeek R1 was developed at a cost of just millions of dollars, while comparable U.S. models require billions, yet it performs similarly to its U.S. counterparts [2] - The efficiency of DeepSeek could significantly reduce the need for data centers, impacting infrastructure players like Oracle [3] Group 2: Project Stargate Concerns - Oracle's stock had previously surged due to the announcement of Project Stargate, which was presented by President Trump alongside Oracle CEO Larry Ellison [5] - Uncertainty regarding the funding sources for the promised $500 billion, including reliance on debt financing, has led to investor disappointment [5]