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Shares of Oracle (Nasdaq: ORCL) stock were trending lower on Tuesday, down approximately 5%. This comes one day after it was reported that the cloud computing giant would be involved in the TikTok takeover deal.

The White House confirmed Monday that Oracle has been tapped to serve as TikTok’s security provider, monitoring data security and overseeing the algorithm. Data will be stored on servers operated by Oracle in the U.S.

Details and terms of the deal to acquire TikTok from China-based ByteDance will be announced later this week. But White House Press Secretary Karoline Leavitt said it will be owned by a majority of U.S. investors. According to the AP, Silver Lake private equity, as well as Michael Dell and Rupert Murdoch could potentially be among the ownership partners.

It is another huge win for Oracle, which earlier this year announced its involvement in a $500 billion AI infrastructure project. Earlier this month, Oracle stock skyrocketed some 42% after it reported that it had increased its backlog by 393% with some $455 billion in contracts in the pipeline.

New co-CEOs

It was a busy news day for Oracle as the company also announced a leadership transition, naming two new co-CEOs — Clay Magouyrk and Mike Sicilia. Magouyrk previously served as president of Oracle Cloud Infrastructure while Sicilia was president of Oracle Industries.

They will replace Safra Katz, who has been the CEO since 2014. Katz will become the executive vice chair of the Oracle board.

Clay’s years of experience leading Oracle’s large, fast-growing Cloud Infrastructure business has demonstrated his readiness for a CEO role,” Oracle chairman Larry Ellison said. “Mike has spent the last several years modernizing Oracle’s Industry applications businesses—including Oracle Health—by completely rebuilding those applications using the latest AI technologies. A few years ago, Clay and Mike committed Oracle’s Infrastructure and Applications businesses to AI—it’s paying off.”

So why is the stock price dropping?

The news was embraced by investors and analysts on Monday, as Oracle’s stock price rose about 5% to around $327 per share.

Morgan Stanley raised its price target to $320 per share, from $246, on the strength of Oracle’s pipeline of massive cloud computing contracts with several major AI players. Oracle had a median 12-month price target of $350 per share, which is 12% higher than its current share price. It is rated as a buy among most analysts.

But on Tuesday, Oracle lost pretty much everything it gained Monday, dropping about 5% back to around $313 per share.

The selloff likely had more to do with investors taking profits and being wary of the high-flying stock’s valuation. There may also be some concern about the risk of a high concentration of revenue focused on a smaller pool of massive customers.

Oracle has had a tremendous year, up 89% year-to-date. It is also extremely expensive, with a P/E ratio of 76. The selloff is less a reflection of its growth prospects, which are massive, and more about its valuation.

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