The Oracle Corporation securities fraud class action lawsuit was filed on February 3, 2026 by Kessler Topaz Meltzer & Check, LLP on behalf of those who purchased or otherwise acquired Oracle Corporation (“Oracle” or the “Company”) (NYSE: ORCL) common stock between June 12, 2025, and December 16, 2025, inclusive (the “Class Period”). Captioned Barrows v. Oracle Corporation, et al, Case No. 1:26-cv-00127-UNA (D. Del.), the Oracle class action lawsuit alleges that Oracle and/or certain of its officers and/or directors violated federal securities laws by making false or misleading statements and/or omitted to disclose material information.
If you experienced losses as a result of your Oracle Corp. investment and want to find out more about this action and your rights, fill out the form on this page or contact attorney Jonathan Naji, Esq. of KTMC by calling (484) 270-1453 or via e-mail at info@ktmc.com.
CASE BACKGROUND:
Oracle, a Delaware corporation with its principal executive offices in Austin, Texas, is a technology company that provides, among other things, infrastructure for operating artificial intelligence (“AI”) programs.
During the Class Period, Defendants misled investors by touting the Company’s contracts to develop data center capabilities for AI infrastructure and falsely assuring investors that the Company’s significant capital expenditures (“CapEx”) would quickly result in accelerated revenue growth. For example, Defendants assured investors that the Company’s substantially increased spending on AI infrastructure—including for data centers used by OpenAI, the operator of ChatGPT—would rapidly convert into “accelerating revenue and profit growth” and that “we have a very good line-of-sight for our capabilities to . . . just spend on that CapEx right before it starts generating revenue.”
However, on September 24, 2025, S&P Global Ratings warned that OpenAI “could account for more than a third of total Oracle revenues by fiscal 2028 and even a greater share by fiscal 2030,” creating risks given that “OpenAI’s ability to meet contractual obligations will be contingent on AI tailwinds continuing and its models being a market leader to continue to raise external financing.” On this news, the price of Oracle common stock declined $5.37 per share, or nearly 2%, from a close of $313.83 per share on September 23, 2025, to close at $308.46 per share on September 24, 2025.
The following day, on September 25, 2025, analysts at Rothschild & Co. Redburn initiated coverage of Oracle at “Sell,” warning, among other things, that the Company’s promises of massive new revenues from its increased AI infrastructure business were “unlikely to materialize” and set a $175 price target for Oracle—representing a 40% pullback in the Company’s stock. In response, the price of Oracle common stock declined an additional $17.13 per share, or more than 5.5%, from a close of $308.46 per share on September 24, 2025, to close at $291.33 per share on September 25, 2025.
After the market closed on December 10, 2025, Oracle announced its financial results for the second quarter of fiscal year 2026, including revenue growth below analysts’ consensus estimate, quarterly CapEx well above analysts’ estimates, and negative free cash flow of more than $10 billion. During the accompanying earnings call, Defendant Douglas Kehring (the Company’s Principal Financial Officer) revealed that Oracle now projected $50 billion of CapEx in fiscal year 2026—$15 billion more than the Company’s previous projection in September 2025 and as much as $25 billion more than the Company’s projection in June 2025. Notably, despite projecting substantially increased spending, Oracle did not increase its guidance for 2026 revenue, and increased its guidance for 2027 revenues by only $4 billion.
In response to an analyst’s question about how much money Oracle needs “to raise to fund its AI growth plans ahead,” Defendant Clayton Magouyrk (the Company’s new Co-Chief Executive Officer) further stoked concerns by failing to provide a specific number and revealing only that the Company expected to spend “less” than $100 billion—suggesting that Oracle may require a massive amount of capital funding through equity raises or additional debt.
As Bloomberg and other media outlets reported that evening, the cost of protecting the Company’s debt against default for five years—a notable measure of Oracle’s credit risk—reached its highest level since April 2009. An AllianceBernstein analyst explained, “Oracle really matters because it is the harbinger of the AI capex boom,” and “[t]his repricing in debt markets is very consistent with the view that risks are building.” On this news, the price of Oracle common stock declined $24.16 per share, or nearly 11%, from a close of $223.01 per share on December 10, 2025, to close at $198.85 per share on December 11, 2025.
After the market closed on December 11, 2025, Oracle filed its quarterly financial report on Form 10-Q with the SEC, which revealed that the Company had “$248 billion of additional lease commitments, substantially all related to data centers and cloud capacity arrangements, that are generally expected to commence between the third quarter of fiscal 2026 and fiscal 2028 and for terms of fifteen to nineteen years that were not reflected on our condensed consolidated balance sheets as of November 30, 2025.” Analysts at CreditSights later labeled this revelation a “bombshell disclosure,” noting that the Company’s lease commitments had increased massively from the prior quarter, when the Company had reported just under $100 billion in lease commitments. As Bloomberg reported, “Oracle’s future lease exposure far exceeds similar commitments by peers,” with “a mismatch between the long duration of the property leases and much shorter contracts with key customers such as OpenAI.”
On December 12, 2025, Bloomberg further reported that Oracle had “pushed back the completion dates for some of the data centers it’s developing for the artificial intelligence model developer OpenAI to 2028 from 2027” due to “labor and material shortages”—suggesting that Oracle’s promised revenue growth resulting from its increased spending may be further delayed, if it arrives at all. In response to these revelations, the price of Oracle common stock declined $8.88 per share, or approximately 4.5%, from a close of $198.85 per share on December 11, 2025, to close at $189.97 per share on December 12, 2025.
On December 17, 2025, Financial Times reported that Blue Owl Capital—“the primary [financial] backer for Oracle’s largest data centre projects in the US”—had backed out of funding a $10 billion Oracle data center intended to serve OpenAI. According to the report, Blue Owl pulled out of the deal as a result of concerns about Oracle’s spending commitments and rising debt levels. On this news, the price of Oracle common stock declined $10.19 per share, or approximately 5.4%, from a close of $188.65 per share on December 16, 2025, to close at $178.46 per share on December 17, 2025.
The complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about the Company’s business and operations. Specifically, Defendants misrepresented and/or failed to disclose that: (1) Oracle’s AI infrastructure strategy would result in massive increases in CapEx without equivalent, near-term growth in revenue; (2) the Company’s substantially increased spending created serious risks involving Oracle’s debt and credit rating, free cash flow, and ability to fund its projects, among other concerns; and (3) as a result, Defendants’ representations about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis.
THE LEAD PLAINTIFF PROCESS:
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased or acquired Oracle Corporation common stock during the Class Period to seek appointment as lead plaintiff in the Oracle Corporation class action lawsuit. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
ABOUT KESSLER TOPAZ MELTZER & CHECK, LLP:
Kessler Topaz Meltzer & Check, LLP (KTMC) is a leading U.S. plaintiff-side law firm focused on securities-fraud class actions and global investor protection. The firm represents individual investors as well as institutions, such as major pension funds, asset managers, and international investors. KTMC has led some of the largest recoveries in securities litigation and has been recognized by peers and the legal media with numerous accolades, including The National Law Journal’s Plaintiff’s Hot List and Trailblazers in Plaintiffs' Law, BTI Consulting Group’s Honor Roll of Most Feared Law Firms, The Legal Intelligencer’s Class Action Firm of the Year, Lawdragon’s Leading Plaintiff Financial Lawyers, and Law360’s Titans of the Plaintiffs Bar. The firm operates globally with offices in Pennsylvania and California.