Oracle Shares Drop 65% Amid AI Debt Concerns

Shares of Oracle Corporation have declined 60% to 65% from their 52-week high, reaching a low of $121.50 on July 18, 2026. The sell-off follows a shift in investor sentiment from AI optimism to concerns over the company's aggressive capital expenditure and rising leverage. Long-term liabilities have climbed to $176.9 billion, with capital expenditures totaling $55.7 billion in fiscal 2026 and projected to reach up to $95 billion in fiscal 2027.

S&P Global Ratings downgraded Oracle's credit rating from BBB to BBB- on July 9, placing the company one notch above junk status. The agency cited negative free cash flow and significant concentration risk, as approximately half of Oracle's $638 billion remaining performance obligation is tied to a single customer, OpenAI, via a $300 billion cloud deal. The risk is further compounded by OpenAI's recent decision to delay its initial public offering.

To fund its AI data-center expansion, Oracle added $43 billion in debt during fiscal 2026 and plans to raise another $40 billion through debt and equity in the current fiscal year. This includes a planned $20 billion equity issuance later in 2026. Despite these financial pressures, the company maintains a net margin of nearly 27% and is guiding for $90 billion in revenue for the 2027 fiscal year.