Core Viewpoint - Oracle's disappointing Q2 2026 earnings results have led to a significant drop in its stock price, impacting the broader tech and AI sectors [2][3][8] Financial Performance - Oracle reported non-GAAP earnings per share (EPS) of $2.26, a 54% increase, and total revenue of $16.1 billion, a 14% increase [6] - Analysts had expected total revenue to be higher at $16.21 billion, leading to investor disappointment despite the EPS beating expectations [3] Market Reaction - Oracle's stock price fell over 12% to $196.25 per share following the earnings report [8] - Major chip companies in the AI space experienced stock price declines, including AMD, Arm, Broadcom, Intel, Micron, NVIDIA, Qualcomm, and TSMC, with drops ranging from 0.9% to 1.4% [7] Industry Concerns - The announcement of new agreements with AI investors like Nvidia and Meta raised concerns about circular spending in the AI industry, contributing to fears of an AI bubble [4] - Oracle's remaining performance obligations increased to $523 billion, but the circular spending concerns have renewed skepticism among investors [4]

Core Viewpoint - Oracle's disappointing Q2 2026 earnings results have led to a significant drop in its stock price, impacting the broader tech and AI sectors [2][3][8]. Financial Performance - Oracle reported non-GAAP earnings per share (EPS) of $2.26, a 54% increase year-over-year, and total revenue of $16.1 billion, up 14% [6]. - Despite beating EPS expectations, Oracle's total revenue fell short of analyst forecasts of $16.21 billion, contributing to a 12% decline in its stock price [3][8]. Market Reaction - Following Oracle's earnings report, major chip companies in the AI space experienced stock price declines, including Advanced Micro Devices (down 1.2%), Arm Holdings (down 1.2%), and Nvidia (down 1.3%) [7]. - Broader tech stocks also faced declines, with Alphabet down 0.5%, Amazon down 0.7%, and Microsoft down 0.6% [10]. Industry Concerns - Oracle's new agreements with AI investors like Nvidia and Meta have raised concerns about circular spending in the AI industry, which could indicate a potential bubble [4]. - The total remaining performance obligations for Oracle increased to $523 billion, but investor fears about the sustainability of AI investments have intensified [4].

The S&P 500 ( SP500 ) finished the last week trading at a Shiller P/E ratio of 39.84, that's just below the 2000 dot-com bubble levels and around 135% above the median/average value of 16/17. Thus, IAnalyst’s Disclosure:I/we have a beneficial short position in the shares of SPX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship wit ...