Shares of Oracle Financial Services Software (OFSS) plunged to Rs 11,061 apiece, marking the sharpest single-day fall since late July. The stock is currently the top loser on the Nifty IT index, which is down over half a percent.
This decline follows a Financial Times report indicating that around $18 billion in loans tied to an Oracle-leased data center in New Mexico are under pressure, with loans quoted at 89 to 91 cents on the dollar by syndicate banks including Santander and Jefferies.
The concerns are exacerbated by escalating local opposition to the 1,400-acre "Project Jupiter" campus in Dona Ana County, due to fears it could impact water supply and air quality, potentially derailing Oracle's AI infrastructure expansion. OFSS, being the Indian subsidiary of Oracle, is directly affected by these developments.
Meanwhile, other IT stocks are also feeling the pressure after US President Donald Trump extended the $100,000 fee on employers for H-1B visas by another year. This extension, announced in a presidential proclamation on Friday, has led to a 92% decrease in H-1B registrations by large IT outsourcing firms since the 2025 decision.
IT stocks have experienced significant volatility this year. Earlier this month, Indian IT stocks rallied after leaders from OpenAI and Anthropic called for a slowdown in AI development to manage risks, boosting sentiment for tech stocks on Dalal Street.
Goldman Sachs issued a cautious note, stating that IT services demand remains weak despite robust tech spending, and AI-led deflation could continue for another one to two years. The firm noted that GCCs are growing faster than IT services companies, bringing more work in-house.
Background
IT stocks have seen sharp upswings and downswings this year, influenced by global tech developments and regulatory changes. The extension of the H-1B visa fee and concerns over Oracle's data center loans add to the sector's volatility.
As the situation unfolds, investors will be closely watching for any further developments regarding Oracle's data center issues and the impact of the H-1B visa fee extension on IT stocks.
