Oracle Shares Dip After Rally: Government Discount Deal and TikTok Investment in Focus

Oracle Corporation saw its stock edge lower on Monday morning following a week of strong gains, as investors reacted to reports of the company offering steep discounts to the US government and its potential role in a new TikTok ownership deal, Investor’s Business Daily reports.

After surging 13% last week, Oracle shares fell more than 2% in early trading to $231.79. Despite the dip, the stock remains close to record highs and is up 39% year-to-date.

The pullback comes amid news that Oracle has agreed to offer a 75% discount on its license-based software and significant reductions on cloud services to the US federal government. The deal, in effect until the end of November, was described by the General Services Administration (GSA) as a first-of-its-kind arrangement aimed at expanding access to cloud infrastructure across federal agencies.

This marks a major development in the Trump administration’s ongoing efforts to lower government IT costs. The initiative began under the Elon Musk-led Department of Government Efficiency (DOGE) and continues despite Musk’s recent departure from the administration.

While the discount may weigh on short-term revenue, analysts note that it could lead to wider adoption of Oracle’s cloud services across government agencies, potentially boosting long-term growth. Oracle CEO Safra Catz expressed enthusiasm for the partnership, saying it would help departments modernize and benefit from cloud and AI technology.

Separately, reports emerged over the weekend that Oracle is part of a consortium nearing a deal to acquire a controlling stake in the US operations of TikTok. Under the proposed agreement, TikTok would launch a new US version of its app to comply with a 2024 law mandating ByteDance reduce its ownership below 20% to avoid a national ban.

Oracle’s participation in the investor group could further solidify its position in the consumer data and cloud infrastructure space, though final details of the deal have not yet been confirmed.

Despite Monday’s decline, Oracle remains one of the best-performing large tech stocks. The recent surge was fueled by news that the company had signed several major cloud contracts, including one reported by Bloomberg with OpenAI. That deal, which could generate up to $30 billion in annual revenue by fiscal 2028, is seen as a significant vote of confidence in Oracle’s cloud infrastructure and AI capabilities.

Oracle reported $10.3 billion in cloud infrastructure revenue for fiscal 2025 and expects that figure to grow 70% in fiscal 2026. Investors have responded positively to Oracle’s efforts to compete with larger cloud providers like Amazon Web Services and Microsoft Azure, particularly in the fast-growing AI services market.