Oracle Corporation (ORCL) Slips Amid Concerns Over Debt-Fueled AI Data Center Expansion

Impax Asset Management's "Impax US Sustainable Economy Fund" released its Q4 2025 investor letter. A copy of the letter can be downloaded here. The fund reported that equity markets remained volatile during the quarter amid concerns over elevated valuations and financing for large-scale data center investments, although the portfolio modestly outperformed the Russell 1000 benchmark on the back of sustainability tilts and stock-specific gains, particularly within Health Care and Financials. On an annual basis, the Fund’s Institutional Class delivered a total return of 16.00% in 2025, compared to 17.37% for the Russell 1000, reflecting the impact of sector allocation and company-level developments such as gains in pharmaceutical and payment processing holdings and weakness in certain Consumer Staples names. Management noted that performance was influenced more by changing market leadership than macroeconomic deterioration, while maintaining a cautiously optimistic outlook supported by falling interest rates, resilient corporate earnings, and continued investment in structurally advantaged businesses positioned to benefit from the transition toward a more sustainable economy. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Impax US Sustainable Economy Fund highlighted stocks like Oracle Corporation (NYSE:ORCL). Oracle Corporation (NYSE:ORCL) provides enterprise cloud infrastructure and software solutions, positioning itself at the center of AI-driven data center expansion and digital transformation initiatives. The one-month return of Oracle Corporation (NYSE:ORCL) was -11.45% while its shares traded between $118.86 and $345.72 over the last 52 weeks. On February 17, 2026, Oracle Corporation (NYSE:ORCL) stock closed at approximately $153.97 per share, with a market capitalization of about $442.52 billion.

Impax US Sustainable Economy Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q4 2025 investor letter:

"Oracle Corporation (NYSE:ORCL) stands out with a strong sustainability profile, offering notable opportunities in Digital Infrastructure, Education and the development of Enhanced Skills & Innovation. Recently, the stock declined due to worries that the company is accumulating excessive debt to finance its AI data center expansion supported by OpenAI."

Oracle Corporation (NYSE:ORCL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 122 hedge fund portfolios held Oracle Corporation (NYSE:ORCL) at the end of the third quarter, which was 124 in the previous quarter. While we acknowledge the risk and potential of Oracle Corporation (NYSE:ORCL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Oracle Corporation (NYSE:ORCL) and shared the list of the most profitable software stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.