Oracle CEO Clay Magouyrk, proper, speaks on a media tour of the Stargate knowledge heart in Abilene, Texas, on Sept. 23, 2025.
Kyle Grillot | Bloomberg | Getty Photographs
Oracle simply wrapped up its worst week on Wall Avenue in 25 years as issues proceed to mount in regards to the software program firm’s debt load and whether or not its bet-the-house funding on synthetic intelligence will repay.
The inventory plummeted 19% this week, dropping at the least 2.6% every of the previous 5 days. It is the steepest weekly drop since a 20% plunge in August 2001, in the course of the depths of the dot-com bust.
The previous 9 months have been brutal for Oracle buyers. After the corporate reached a peak market cap of $900 billion in September, on budding enthusiasm about Oracle’s AI clients, the inventory has misplaced about 55% of its worth. The crux of the issue is that for Oracle to meet its AI infrastructure dedication, primarily to OpenAI, it is having to lift file quantities of debt, creating steadiness sheet threat whereas specializing in lower-margin choices.
Oracle was sitting on about $130 billion in debt on the finish of Might, with capital expenditures rising 162% to almost $56 billion within the 2026 fiscal yr. It is racing to open knowledge facilities alongside cloud giants Amazon, Microsoft and Google, however with out having the ability to promote a full expertise stack like its rivals.
Oracle recorded unfavourable free money circulation of just about $24 billion within the newest fiscal yr. Earlier this month, Oracle stated that, in fiscal 2027, it plans to lift $40 billion by means of debt and fairness financing, together with a $20 billion share sale introduced earlier, after $43 billion in debt gross sales and $5 billion from fairness issuance final fiscal yr.
“We anticipate financing/leverage and the tempo of fairness issuance to stay the central investor debate close to time period, at the same time as demand indicators keep robust,” Evercore analysts, who suggest shopping for the inventory, wrote in a be aware on Wednesday.
Like Evercore, most companies stay bullish on Oracle’s prospects regardless of buyers’ rising issues. In keeping with FactSet, 71% of analysts suggest shopping for the inventory, the best proportion in 15 years.
Oracle did not reply to a request for remark.
Oracle is going through a number of market headwinds. Along with its hefty capital necessities, the corporate is buying and selling decrease from the selloff in software program names as buyers fear that AI fashions will change lots of their merchandise’ capabilities. The iShares Expanded Tech-Software program Sector Trade-Traded Fund (IGV) is down 16% up to now in 2026, whereas Oracle has fallen 24%.
In its annual report final week, Oracle disclosed that head rely shrank 13% to 141,000 workers in fiscal 2026, with a notable pullback in gross sales and advertising and marketing.
Larry Ellison, Oracle’s co-founder, was absent from the earnings name this month, leaving twin CEOs Clay Magouyrk and Mike Sicilia and just lately appointed finance chief Hilary Maxson to reply questions.
“Hilary has a tricky life,” Magouyrk stated on the decision.
Due to Oracle’s retreating inventory value, Ellison has been surpassed on the world’s listing of wealthiest folks by Google co-founders Larry Web page and Sergey Brin, Amazon founder Jeff Bezos and Michael Dell. Ellison continues to be price over $200 billion.
Oracle is pushing ahead with its buildout plans, focusing on knowledge facilities in Michigan, New Mexico and Texas in 2027.
“As we pursue these alternatives, we’ll stay targeted on disciplined capital allocation, sustaining a robust steadiness sheet, and preserving our investment-grade credit standing,” Maxson stated on the earnings name this month.
WATCH: Choices merchants purchase calls in Oracle following AI-driven layoffs
