- Oracle shares fell 19% this week, the sharpest weekly drop in 25 years, amid rising skepticism over the software giant's aggressive AI investment strategy.
- The company's capital expenditures surged 162% to nearly $56 billion in fiscal 2026, leading to negative free cash flow of almost $24 billion and a total debt load of $130 billion.
- Investors are specifically concerned about a $300 billion backlog deal with OpenAI, questioning the AI startup's ability to fulfill its long-term financial commitments to Oracle.
- Despite the selloff, Oracle's total backlog has reached $638 billion, and 71% of analysts maintain a buy recommendation on the stock, the highest percentage in 15 years.
Quotes
“We expect financing/leverage and the pace of equity issuance to remain the central investor debate near term, even as demand signals stay strong”
Sources
- Oracle stock has worst week since 2001 dot-com bust as AI financing concerns escalateCNBC
- Oracle Stock Is Down 44% in the Last 9 Months. Is This a Buying Opportunity, or Is More Downside Ahead?
- Oracle Stock Is Down 44% in the Last 9 Months. Is This a Buying Opportunity, or Is More Downside Ahead?Yahoo Finance