Oracle's $116-billion surge leaves little room for error on AI

ORACLE INVESTORS FIND themselves at a pivotal crossroads. Either heed the warning from a growing list of indicators that suggest the stock has run up too far, too fast — or continue to chase another rally that's been supercharged by lofty artificial intelligence expectations.

- BLOOMBERG

Shares of the software maker have soared 75% from April's low, including their best two-day gain since 2001 after its earnings report last week showed AI-fueled revenue growth is gaining steam. However, that's left the stock trading at its most overbought level in 25 years and at its steepest valuation in more than two decades. And there are signs investors may already be balking.

Oracle shares fell nearly 1% in premarket trading Tuesday as the Israel-Iran conflict drags on. That follows a nearly 2% decline on Monday, a day that saw the broader Nasdaq 100 Index rally 1.4%.