Tech Stocks Plunge: Will Nvidia and Oracle Rebound?

Nvidia and Oracle shares have fallen significantly over the past three months due to investor skepticism about AI infrastructure spending. Despite this, Nvidia's dominance in the GPU data center market, with an 86% share, could fuel its sales and earnings for years.

The company recently announced a $500 billion infrastructure deal with SK Group, but investors were concerned that it would rely on lending money to other companies to build AI infrastructure. However, most of this year's $750 billion in AI infrastructure projects do not involve Nvidia investments.

Nvidia's revenue rose 85% in the first quarter of fiscal 2027 to $81.6 billion, and diluted earnings jumped 140% to $1.87 per share.

Oracle shareholders are panicking over the company's increased spending on AI data centers, which could rise to as much as $70 billion in fiscal 2027. However, Oracle has lucrative contracts worth $638 billion in remaining performance obligations (RPO), with $77 billion expected to be realized as revenue in fiscal 2027.

Oracle is investing in new infrastructure that will help it fulfill its sizable contracts, which could lead to long-term gains for the company and its shareholders.