Oracle's Contradictory Strategy: Massive Layoffs, a $16 Billion AI Data Center, and New Arm Partnership Ahead of Earnings

Oracle is tearing down parts of its business to build new ones — and investors will get the first major test of that bet on June 10. The company has confirmed it is cutting around 30,000 jobs, roughly 18% of its global workforce, with most separations effective between June 1 and June 15. That comes just as Oracle, together with OpenAI and other partners, broke ground on "The Barn" in Saline Township, Michigan — a $16 billion data center campus designed to reach one gigawatt of capacity. The project is the largest single investment in Michigan’s history and a key piece of the broader Stargate initiative to roll out AI computing infrastructure across the United States.

The workforce reduction is not a sign of distress but a deliberate reallocation of capital from legacy software into AI infrastructure and new data centers. That shift gained fresh momentum on June 2, when Arm confirmed that Oracle Cloud Infrastructure has joined the AGI CPU ecosystem. Arm CEO Rene Haas named Oracle as a customer of the new AGI processors during the Computex trade show in Taipei, alongside ByteDance. The chips are designed for agentic AI workloads — applications that coordinate across multiple tools and data sources independently. Crucially, those workloads shift some computational load out of the model itself into coordination layers that demand CPU capacity, not just GPU power. Arm’s AGI chip offers up to 136 Neoverse V3 cores and DDR5-8800 memory support, positioning it as an orchestration layer for distributed AI infrastructure. For Oracle, the deal signals that it is tailoring its cloud platform for next-generation AI architectures, not just adding generic capacity.

All of this sets a high bar for Oracle’s fiscal fourth-quarter 2026 earnings, due after the U.S. market close on June 10. Analysts are looking for earnings of $1.96 per share on revenue of roughly $19.1 billion. Oracle’s own non-GAAP guidance ranges from $1.96 to $2.00 per share, with cloud revenue growth seen at 46% to 50% and total revenue growth of 19% to 21%. For the full 2026 fiscal year, the company targets $67 billion in revenue against capital expenditures of $50 billion. By 2027, it has already raised its revenue forecast to $90 billion. Those spending plans could eventually reach $100 billion for server and hardware infrastructure, a scale that explains why even after the stock’s strong run, investors remain skittish.

Should investors sell immediately? Or is it worth buying Oracle?

The stock has climbed nearly 30% over the past 30 days and now trades about 34% above its 50-day moving average. That rally has pushed the 14-day relative strength index to 70.3, technically overbought. Since its February low of €113.86, the shares have more than doubled, yet they still sit roughly 27% below the 52-week high of €280.70. The 30-day annualized volatility stands at 67.4% — exceptionally high for a large-cap name.

One additional risk surfaced in early June: a critical security flaw in Oracle WebLogic Server was added to the U.S. cybersecurity agency CISA’s Known Exploited Vulnerabilities catalog. Attackers can compromise the server without authentication, and federal agencies were required to patch it by June 4. That could become a distraction as Oracle pushes its cloud message.

On June 10, the question is whether Oracle’s massive capital outlays are translating into operational leverage — and whether the new Arm partnership and the Barn project are enough to keep the market’s faith in the AI infrastructure story, even as 30,000 employees pack their desks.

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