Oracle stock has taken a brutal plunge — losing 57% of its value since hitting a 52-week high of $345.72 last September.

On March 31, bad news spread to Oracle employees when the company announced plans to slash up to 30,000 jobs — nearly 19% of its global workforce.

Why is Oracle creating misery for so many workers? The company is investing billions of dollars in AI computing centers and needs cash to pay for them. Cutting these jobs should free up as much as $10 billion in incremental free cash flow.

Cost cutting will not enable the company to beat growth expectations, and it looks to me that Oracle stock will likely fall further.

This raises three questions.

Why Has Oracle Stock Fallen So Far?

The stock has crated because investor sentiment has changed. While last fall traders feared missing out on the revenue growth potential of AI data centers, they have since refocused on their fear of Oracle’s shrinking profit margins and its sudden, severe cash crunch.

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