Core Viewpoint - Oracle is significantly increasing its debt to finance AI data centers, with a total of $523 billion in remaining performance obligations from signed contracts, including $68 billion added in Q2 of fiscal 2026 [1][2]. Financial Performance - For the six-month period ending November 30, Oracle generated $10.2 billion in operating cash flow but incurred $20.5 billion in capital expenditures, resulting in a negative free cash flow of $10.3 billion [4]. - Capital spending has more than tripled year-over-year as Oracle invests heavily in its AI strategy [4]. Debt Accumulation - Oracle's debt has risen to approximately $108 billion, up from $92.6 billion in May, following an $18 billion bond sale in September [5]. - Analysts estimate that Oracle may need to add $100 billion in debt over the next four years to fulfill its contracts, particularly with OpenAI [8]. Market Reaction - Oracle's stock has declined significantly following the release of its second-quarter report, indicating investor skepticism about the company's ability to convert its AI infrastructure backlog into revenue [6][9]. - The company's AI growth narrative is currently not resonating with investors, leading to a negative sentiment in the market [9].

Core Viewpoint - Oracle Corp.'s credit risk has reached a 16-year high due to increased spending on data centers and equipment, raising concerns about the profitability of its artificial intelligence investments [1]. Group 1: Credit Risk and Market Reaction - The cost of protecting Oracle's debt against default for five years increased by 0.17 percentage points to approximately 1.41 percentage points per year, marking the highest level since April 2009 [2]. - The spread on Oracle's 6% bond due in 2055 widened by 19 basis points to 196 basis points, indicating a decline in investor confidence [3]. - Oracle's shares fell by 10% on Thursday, the largest intraday drop since January, reflecting market concerns [4]. Group 2: AI Investment and Debt Concerns - Oracle is heavily borrowing for artificial intelligence data centers, leading banks involved in construction loans to purchase credit default swaps to hedge their exposure [5]. - Rising leverage is negatively impacting Oracle's credit metrics, with fears that it may push the company into high-yield status [5]. - The company has over $100 billion in debt and has been burning through cash due to heavy capital expenditures [6].

Joining us now is Rothschild and Redburn's Alex Hazel. He holds Wall Street's loan cell rating on the name. In fact, since his call back in September, Oracle has fallen 35%.So, round of applause, Alex. Welcome. Um, what why are they being differentiated or are they being differentiated for their heavy capex plans.>> Uh, thanks for having me on the show. I think there really two building blocks and the first one really applies also to other hyperscalers like these large scale GPU deployments overall generate ...

Joining us now is Rothschild and Redburn's Alex Hazel. He holds Wall Street's loan cell rating on the name. In fact, since his call back in September, Oracle has fallen 35%.So, round of applause, Alex. Welcome. Um, what why are they being differentiated or are they being differentiated for their heavy capex plans.>> Uh, thanks for having me on the show. I think there really two building blocks and the first one really applies also to other hyperscalers like these large scale GPU deployments overall generate ...

Core Insights - Oracle Corporation reported disappointing quarterly results with a revenue of $16.1 billion, falling short of the estimated $16.21 billion [3] - The company's shares dropped nearly 14% to $192.12 following the earnings report, raising concerns about a potential bubble in AI infrastructure [4] - The decline in Oracle's stock also negatively impacted cryptocurrencies linked to decentralized AI projects [1][5] Financial Performance - Oracle's revenue for the three months ending in November was $16.1 billion, which was lower than market expectations [3] - The company had previously raised $18 billion in a significant debt issuance and entered a $300 billion deal with OpenAI [3] Market Reaction - Following the earnings report, Oracle's shares fell nearly 14%, indicating investor disappointment and anxiety regarding AI investments [4] - The weak performance in Oracle's cloud sales is expected to have broader implications for the AI sector [4] Cryptocurrency Impact - Decentralized AI tokens experienced a decline in value after Oracle's disappointing results, reflecting the interconnectedness of traditional tech stocks and crypto markets [5] - Specific AI tokens such as TAO, NEAR, ICP, FIL, and RENDER saw significant drops in their trading values, with declines ranging from 3.89% to 8.5% [6][7]

Oracle shares fell sharply on Thursday, a stark display of investors' concerns about tech companies overspending on artificial-intelligence infrastructure. ...

The Federal Reserve just cutting interest rates again by 25 basis points, but the real headline is that chair Jay Powell signaling the Fed may be done for now. Welcome to the Big Money Show. I'm Taylor Riggs along with my co-host Lydia who Brian Brenberg, Jackie D'Angelus, and with us for the entire hour, Fox Businesses Charlie Gasparino.Great to see you. >> Thanks for having me. >> So, this was the Fed's third straight cut, but it came with division inside the board of governors and the most disscent we've ...

Core Insights - Investors are increasingly skeptical about AI-driven growth, particularly following Oracle's disappointing earnings report, which raised concerns about an AI bubble fueled by debt-laden investments [1][3][8] Company Performance - Oracle's shares fell nearly 15%, reaching six-month lows, after a period of significant growth where they doubled in value from January to early September [1] - The company's backlog increased by nearly $70 billion last quarter, totaling $523 billion, but concerns remain about reliance on OpenAI for future revenue [5][6] Market Reaction - Other AI-related stocks, including Nvidia, Palantir, and Broadcom, also experienced declines of over 3% [2] - The market's reaction indicates a shift towards demanding tangible proof of AI's commercial benefits rather than accepting optimistic narratives [3][8] Investment Concerns - Oracle's capital expenditures reached $12 billion last quarter, exceeding Wall Street's expectations by $4 billion, and the full-year capex target was raised to $50 billion from $35 billion [7] - Analysts express concerns about Oracle's ability to convert its growing backlog into sustainable revenue, with some describing the situation as a "show-me story" [8] Debt Financing - Oracle has heavily financed its data center expansion, selling $18 billion in debt in September, one of the largest bond sales by a tech company [9] - There is a growing trend of investors bidding up Oracle's credit default swaps, indicating increased concern over the company's debt obligations [9]

Oracle Corp (NYSE:ORCL) co-founder and chief technology officer Larry Ellison is one of the richest people in the world, so rich that he even surpassed Elon Musk briefly for the title of richest person in the world earlier this year. A drop in Oracle's share price on Thursday has Ellison feeling the heat.Oracle stock is among today’s weakest performers. Why is ORCL stock falling?Ellison's Wealth DropsEllison owns around 41% of Oracle’s shares, a software company he co-founded in 1977.That stake in Oracle an ...

Company Overview - Oracle's stock experienced a significant decline of over 12%, dropping from approximately $223 to $194 per share, resulting in a loss of $90 billion in market capitalization [1][3][7] - Co-founder Larry Ellison's net worth decreased by nearly $35 billion, falling from $276 billion to $244 billion, which caused him to drop from the second to the third position on the Forbes list of the world's richest individuals [2][5] Financial Concerns - The decline in Oracle's stock triggered a sector-wide selloff in technology stocks, affecting major firms such as Nvidia, AMD, Micron, Broadcom, and Arm, while the Nasdaq index fell by 0.6% [3] - Investors expressed concerns over Oracle's substantial debt, which is reported to be $100 billion, leading to increased purchases of credit-default swaps as a hedge against potential default [4][7] Market Reactions - The rise in credit-default swap prices reached a five-year high, indicating heightened fears regarding Oracle's ability to meet its debt obligations [7] - Despite the negative market reaction, some analysts remain optimistic about Oracle's future, highlighting the $523 billion in business that the company has committed to but has yet to deliver [10]