Investors grew concerned about rising costs, business challenges and changing demand in the betting, AI and cloud computing industries.
- DraftKings stock sank to a three-year low after missing Q3 estimates and cutting its 2026 outlook.
- SoundHound AI hit a two-year low despite 48.5% revenue growth, driven by shrinking margins and concerns over customer churn.
- Oracle stock faced heat after Microsoft reportedly began winding down its AI computing rental deal.
DraftKings Inc. (DKNG), SoundHound AI Inc. (SOUN) and Oracle Corp. (ORCL) stocks tumbled to fresh 52-week lows on Friday as investors reacted to reduced earnings outlook, a quarterly revenue miss and uncertainty surrounding a major AI computing agreement with Microsoft Corp. (MSFT).
DraftKings stock crashed 21%. SoundHound AI stock fell 3%, while Oracle pared losses to end the session 0.8% higher.
DraftKings Faces Steep Earnings Reset
DraftKings stock plunged to over a three-year low of $16.55 on Friday. The online sports betting company disappointed investors with its third-quarter (Q3) results and a cut in its earnings outlook.
Revenue increased 16% year-on-year to $1.33 billion, below analysts’ $1.38 billion estimate, according to Fiscal.ai. Its loss widened to $0.94 per share, compared with the $0.42 per share loss Wall Street expected.
DraftKings also slashed its 2026 revenue outlook to $6.35 billion – $6.55 billion from the previous $6.5 billion – $6.9 billion. More notably, its adjusted EBITDA guidance fell to $175 million – $275 million, down sharply from the earlier $700 million – $900 million range. The company expects to spend about $650 million – $700 million developing its prediction markets business.
Jefferies analyst David Katz lowered DraftKings’ price target to $28 from $44 but maintained a Buy rating. He said the company’s sharply reduced earnings outlook surprised investors and hurt the stock. On Stocktwits, retail sentiment around the stock remained ‘extremely bullish’.
SoundHound AI Struggles With Growth Transition
SoundHound AI stock fell to a two-year low of $3.88 despite its Q3 quarterly climbing 48.5% from the last year to $62.43 million and edging past the Street’s $62.18 million forecast.
The company reported a loss of $0.10 per share, narrower than the $0.12 loss analysts anticipated. However, its gross margin plunged 850 basis points to 34.1%, while adjusted EBITDA loss expanded to $20.7 million from $14.5 million.
Investors also worried about SoundHound’s growth as it shifts toward steady, repeat revenue and exits less profitable deals. The shift has resulted in some customers leaving through LivePerson and delays in revenue from licensing deals. Cantor Fitzgerald cut its price target to $10 from $15, while Northland lowered its target to $8 from $12.
Retail sentiment around the stock remained ‘extremely bullish’.
Oracle Faces Questions Over Microsoft Partnership
Oracle stock declined to a two-year low of $109.21 after reports emerged that Microsoft was gradually ending its arrangement to rent AI computing capacity from the cloud provider.
A Bloomberg report said Microsoft entered the agreement in 2023 to support Bing AI using older Nvidia chips. However, it plans to let the deal expire as its computing requirements have changed.
Microsoft and Oracle also failed to reach an agreement to move more of Microsoft’s operations to Oracle’s cloud platform. Oracle’s cloud business generated $18 billion in revenue in the year ended May 2026. However, heavy data center spending has pushed its free cash flow below zero, raising concerns about whether these investments will pay off. Retail sentiment around the stock remained ‘bullish’.
So far this year, DKNG, SOUN and ORCL stocks have declined between 40% and 58%.
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