Microsoft is quietly shutting down the AI servers it leased from Oracle, and Oracle insists its aging GPUs are still expensive. Which story holds up, and what does that mean for a stock already down by half?
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Oracle (NYSE: ORCL | ORCL Price Prediction) 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 terminating its agreement to lease AI compute capacity to Oracle.
These people said Microsoft refused to renew the contract and spent the last few months turning off the capability. They said Oracle’s hardware was running on older versions 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 closing level at $115.16. Oracle then turned around and closed at $116.01, up 0.74%, for a market value of $361.69 billion.
Microsoft fell 0.99% to $530.61, with no cause reported. For a company worth $3.94 trillion, a lease from the early days of the Bing chatbot is just a small campaign item.
The two accounts are in conflict because a major customer reportedly decided that Oracle’s chips were too old for its needs, while Oracle claims that even its oldest GPUs are being re-leased at a higher price.
What Microsoft is actually ending
The deal was announced in 2023 and provided access to Microsoft’s server to run the new AI version of Bing. Its true size has never been determined and its value has never been disclosed.
At the time, leasing computing power to a rival seemed like a harbinger of a shortage of AI chips. Microsoft is now letting the contract expire and has given no reason.
Oracle says older GPUs still fetch premiums
An Oracle spokesperson said demand for its AI infrastructure remains strong, including for previous generation GPUs. In September, Oracle said that GPUs up for renewal were being renewed or leased to new customers at a 20% premium, adding: “The majority of these GPUs are 4 years old or older. »
Utilization, the share of the GPU fleet in use, was 97.9% that quarter. If Oracle can lease Microsoft’s old capacity again at similar prices, losing the contract will cost it very little.
Oracle’s cloud business brought in $18 billion in the fiscal year ending May 2026. Most of that growth came from OpenAI and other large AI deals much larger than the Bing deal.
Microsoft now holds the pricing power
Microsoft spent $45.2 billion on capital expenditures during its September quarter. Nvidia GB300 systems now make up the bulk of its GPU fleet.
It has also committed more than $80 billion to leasing capacity from other cloud providers, including CoreWeave (NASDAQ: CRWV) and Nebius (NASDAQ:NBIS). Frustrated by costs and delays, she plans to narrow that list down to a few key suppliers. All that leased capacity still needs to be powered, cooled, and networked by someone, and we’ve rounded up seven of those providers in a free report on the AI infrastructure boom.
CoreWeave said 62% of its 2024 revenue came from Microsoft, but it was up 6.14% and Nebius up 7.58% on November 6. For the biggest buyer, the shortage behind the Bing deal has eased, giving Microsoft more pricing power than companies that lease computing power.
How much bad news was already built into the price
Oracle fell 6.93% on November 5, the same day the Philadelphia Semiconductor Index fell 12%, its biggest decline since March 2020. The stock has lost more than half its value since its June 1 high of $248.15.
Buyers approaching the low suggest the market was already expecting bad news like this. However, Oracle’s free cash flow was -$5.396 billion last quarter, so each lost renewal hurts it more than before.
What Could Change Oracle Stock’s Outlook
Microsoft’s exit removes a small, old contract, and Oracle’s fleet usage and renewal bonuses show that older GPUs are still finding paying customers.
Oracle expects at least $90 billion in revenue for fiscal 2027 and non-GAAP EPS of $8.10. At current prices, the stock is likely reflecting much of the decline.
Microsoft takes less cash flow risk than Oracle. Azure grew 48% last quarter and the company still generated $18.6 billion in free cash flow.
The first checks come with the CoreWeave report of November 10 and that of Nvidia on November 17. The real test is Oracle’s next report, expected around December 9, although the company has not confirmed the date. A decline in usage, a disappearing renewal premium, or a close below $109.21 would weaken this view.
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