Oracle stock fell in Monday morning trades following a report it would discount its services for the U.S. government. That marks a slight pullback after shares of the enterprise tech giant surged last week.
Oracle is offering Uncle Sam a 75% discount on its license-based software and a "substantial" discount on cloud services through the end of November, a U.S. General Services Administration official told the Wall Street Journal. The GSA described the agreement as a first-of-its-kind deal to provide the entire government a discount on cloud infrastructure.
On the stock market today, Oracle stock dipped more than 2% 231.79. Shares are taking a breather after Oracle rallied 13% last week.
The Trump administration has been focused on cutting IT-related costs in an effort that started under the Elon Musk-led Department of Government Efficiency, or DOGE. Those efforts are ongoing despite Musk stepping away from the administration.
The Wall Street Journal report noted that Salesforce, Adobe and search software company Elastic have also struck deals to offer discounts on software licenses. The Oracle deal is the first focused on cloud infrastructure, however.
Meanwhile, The Information reported Sunday that an agreement to sell TikTok to a group of investors that includes Oracle is close. As part of the deal, TikTok would reportedly launch a new U.S. version of its app. TikTok is currently available for Americans under a temporary reprieve from a 2024 law, which bans the short-video app unless its parent company ByteDance divests ownership. Oracle is part of an investor group that would dilute ByteDance's ownership of TikTok in the U.S. to below 20%, as required by the law.
Oracle Stock Near Record Highs
After last week's big rally, Oracle stock is still hovering near record highs. Shares rose after Oracle said in a regulatory filing last Monday it had reached "multiple large cloud services agreements." That includes a deal Oracle said could contribute $30 billion in annual revenue starting with the company's fiscal 2028 (Oracle's fiscal 2026 started last month).
The statement from Oracle didn't name the client behind the $30 billion deal. However, Bloomberg reported Wednesday that ChatGPT creator OpenAI had agreed to rent additional cloud capacity from Oracle as part of its Stargate partnership. The deal makes up "at least of the disclosed contract," per the report.
The disclosed contract helped further boost investor confidence that Oracle's cloud business can compete against giants like Amazon and Microsoft to offer AI cloud-computing services. Oracle expects cloud infrastructure revenue to grow 70% during fiscal 2026, the company told investors during its fiscal Q4 earnings results last month. Oracle's total cloud infrastructure revenue for its 2025 fiscal year was $10.3 billion.
Despite the negative stock reaction Monday, the Wall Street Journal report noted that Oracle's deal with the federal government could increase adoption of the company's cloud platform overall. Oracle Chief Executive Safra Catz said the company is "thrilled to work with the GSA to help every department and agency modernize their technology and gain the benefits of Oracle Cloud and AI," in a statement to the Wall Street Journal.
Oracle stock is ahead 39% year to date as of Monday morning. Last year, Oracle rallied 60% to post its best share price growth performance since 1999.
