Quick Read
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Oracle hit a 52-week low after Microsoft reportedly let its AI rental deal lapse, but Oracle insists even its oldest GPUs rent again at higher prices.
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Microsoft holds the pricing power as it rents capacity from CoreWeave and Nebius, whose stocks still rose despite the news.
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Oracle's stock has lost over half its value since June, and negative free cash flow makes each lost renewal sting more.
Oracle( NYSE:ORCL ) shares fell to $109.21 on November 6, 2026, a new 52-week low. The drop came after people familiar with the matter said Microsoft( NASDAQ:MSFT ) is winding down its deal to rent AI computing capacity from Oracle.
Those people said Microsoft declined to renew the contract and has spent recent months switching the capacity off. They said Oracle's hardware ran on older Nvidia( NASDAQ:NVDA ) chips that no longer met Microsoft's specifications. The chip generation was not specified, and Microsoft declined to comment.
The low was about 5.2% below the November 5 close of $115.16. Oracle then turned and closed at $116.01, up 0.74%, for a market value of $361.69 billion.
Microsoft fell 0.99% to $530.61, and no cause was reported. For a company worth $3.94 trillion, a rental contract from the early Bing chatbot days is a small line item.
The two accounts conflict because a top customer reportedly decided Oracle's chips were too old for its needs, while Oracle says even its oldest GPUs get rented again at a higher price.
What Microsoft Is Actually Ending
The deal was announced in 2023 and gave Microsoft server access to run the then-new AI version of Bing. Its full size was never determined, and its value was never disclosed.
At the time, renting computing power from a rival looked like an early sign of an AI chip shortage. Microsoft is now letting the contract run out and has given no reason of its own.
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Oracle Says Old GPUs Still Earn Premiums
An Oracle spokesperson said demand for its AI infrastructure remains strong, including for earlier-generation GPUs. In September, Oracle said GPUs coming up for renewal were renewed or rented to new customers at a 20% premium, adding, "The majority of those GPUs are 4 years or older."
Utilization, the share of the GPU fleet in use, was 97.9% that quarter. If Oracle can rent Microsoft's old capacity again at similar prices, losing the contract costs it very little.
Oracle's cloud business brought in $18 billion in the year ended May 2026. Most of that growth came from OpenAI and other large AI contracts that are far larger than the Bing deal.
Microsoft Now Holds the Pricing Power
Microsoft spent $45.2 billion on capital expenditures in its September quarter. Nvidia GB300 systems now make up most of its GPU fleet.
It has also committed more than $80 billion to renting capacity from other cloud providers, including CoreWeave( NASDAQ:CRWV ) and Nebius( NASDAQ:NBIS ). Frustrated with costs and delays, it plans to cut that list down to a few key suppliers. All of that rented capacity still has to be powered, cooled, and networked by somebody, and we brought seven of those suppliers into a free report on the AI infrastructure boom.
CoreWeave said 62% of its 2024 revenue came from Microsoft, yet it rose 6.14% and Nebius rose 7.58% on November 6. For the biggest buyer, the shortage behind the Bing deal has eased, which gives Microsoft more say over price than the companies that rent out computing power.
How Much Bad News Was Already Priced In
Oracle fell 6.93% on November 5, the same day the Philadelphia Semiconductor Index dropped 12%, its steepest fall since March 2020. The stock has lost more than half its value since its June 1 high of $248.15.
Buyers stepping in near the low suggests the market had already expected bad news like this. However, Oracle's free cash flow was -$5.396 billion last quarter, so every renewal it loses hurts more than it once did.
What Could Change the Outlook for Oracle Stock
The Microsoft exit removes a small, old contract, and Oracle's fleet usage and renewal premiums show that older GPUs still find paying customers.
Oracle expects at least $90 billion in fiscal 2027 revenue and non-GAAP EPS of $8.10. At the current price, the stock likely reflects much of the downside.
Microsoft takes less cash flow risk than Oracle. Azure grew 48% last quarter, and the company still produced $18.6 billion of free cash flow.
The first checks come with CoreWeave's report on November 10 and Nvidia's on November 17. The real test is Oracle's next report, expected around December 9, though the company hasn't confirmed the date. Falling usage, a vanishing renewal premium, or a close below $109.21 would undercut this view.
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