Why Did Oracle Stock Drop After Today’s TikTok News?
Rich Smith, The Motley Fool
Tue, August 11, 2026 at 11:48 PM GMT+5:30
2 min read
- ORCL
-4.06% - NVDA
+0.00%
Oracle(NYSE: ORCL) shareholders got some good news today: The Trump Administration has lifted its ban on the TikTok app on federal government-owned electronic devices and removed the threat of a complete ban in the United States
Following a Justice Department opinion last month that deemed a U.S.-owned TikTok no longer a worrisome “covered application,” suspected of abuse by Chinese cyber-spies, the White House Office of Management and Budget today canceled a 2023 directive banning the app from government devices
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Then Oracle stock dropped 4.1% (through 1:40 p.m. ET)
Wait. What?
I know, right? This sounds like good news for Oracle, which, alongside private equity firm Silver Lake and other investors, has taken a majority stake in TikTok and seems set to profit from the popular social media app
In addition to allaying cyber-spying concerns, the Justice Department has cleared TikTok for use because, with Oracle and the other investors now controlling the company and its content recommendation algorithm amended, TikTok is believed no longer able to “promote specific narratives or spread false information” in the U.S
So all systems should be go for Oracle
Oracle’s bigger problem
Problem is, Oracle isn’t just a software company that owns a popular social media subsidiary. Since agreeing to provide massive amounts of artificial intelligence capacity to companies, including OpenAI, Oracle is now viewed as an “AI stock” in its own right
Building out the infrastructure to provide this capacity turned Oracle’s free cash flow negative last year. Thisyear, the company is expected to burn nearly $24 billion in cash — with the potential to keep on burning cash for the next threeyears
Even owning TikTok won’t change the fact that Oracle has turned itself into a cash-burning machine. Even owning TikTok… may not be enough to save Oracle stock
Missed Nvidia in 2009? This Rare Signal Is Flashing Again
In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. If you’d invested $5,000 then, you’d be sitting on $2,824,765 today.*
Now, for the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. It’s a key player in the $1.8 trillion space race, and with the stock recently sitting 20% off its highs, the window to get in early is closing fast
