Oracle Corporation (ORCL) Fell Due to Concerns About Overinvestment and Funding Needs for AI Infrastructure

Aristotle Funds, an investment advisor, released its “Growth Equity Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index rising 2.66% and the Bloomberg U.S. Aggregate Bond Index increasing by 1.10%. Within the Russell 1000 Growth Index, healthcare, communication services, and financials were the top-performing sectors, while utilities, real estate, and materials lagged. The U.S. economy showed resilience. However, consumer confidence deteriorated toward year-end, raising concerns about future spending and the labor market. Against this backdrop, the Aristotle Growth Equity Fund (Class I-2) returned 0.95%, underperforming the Russell 1000 Growth Index’s 1.12%. Poor security selection in the information technology and consumer discretionary sectors detracted from performance, while positive contributions from healthcare and industrials improved relative performance. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Aristotle Growth Equity Fund highlighted stocks like Oracle Corporation (NYSE:ORCL). Headquartered in Radnor, Pennsylvania, Oracle Corporation (NYSE:ORCL) is a global leader in enterprise information technology. On February 25, 2026, Oracle Corporation (NYSE:ORCL) stock closed at $147.89 per share. One-month return of Oracle Corporation (NYSE:ORCL) was -12.50%, and its shares lost 10.24% over the past 52 weeks. Oracle Corporation (NYSE:ORCL) has a market capitalization of $425.049 billion.

Aristotle Growth Equity Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its fourth quarter 2025 investor letter:

"Oracle Corporation (NYSE:ORCL) detracted from performance in the fourth quarter as investors focused on the OpenAI backlog concentration risk and the significant amount of debt required to fund the company’s datacenter commitments over the next three to four years. Negative concerns about overinvestment and funding needs for AI infrastructure were key debates in the quarter and Oracle remains more leveraged to OpenAI than its peers with an approximately ~55% backlog exposure."

Oracle Corporation (NYSE:ORCL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 111 hedge fund portfolios held Oracle Corporation (NYSE:ORCL) at the end of the fourth quarter, compared to 122 in the previous quarter. While we acknowledge the potential of Oracle Corporation (NYSE:ORCL) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. 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 a list of best stocks in each sector in 2026. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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