S&P Global Ratings Downgrades Oracle to Lowest Investment Grade

S&P Global Ratings downgraded Oracle's credit rating to BBB- on July 9, 2026, the lowest possible investment-grade rating. The agency cited a capital-intensive business model that lacks a competitive moat and current credit metrics that do not meet investment-grade standards.

Despite the downgrade, S&P maintained a stable outlook, expecting the company to generate cash flow as its AI business scales over the next three to five years. However, financial projections show a significant imbalance in growth; while revenue is expected to increase by 239% between fiscal years 2022 and 2028, debt is projected to rise by 412%.

To account for these costs, S&P increased its 2027 capital expenditure guidance for Oracle from $60 billion to $95 billion. The agency characterized the company as a "show me" story with limited visibility, noting that maintaining investment-grade status may depend on future equity issuances to stabilize the balance sheet.