Oracle(US:ORCL) Di Yi Cai Jing·2025-11-27 03:57Core Viewpoint - Oracle is facing significant risks related to its debt levels and market concerns over its aggressive financing for artificial intelligence projects, leading to increased hedging activities by banks and investors [1][2]. Group 1: Stock Performance and Market Reaction - Oracle's stock price experienced a sharp decline of nearly 28% over the past month, with its market capitalization dropping below $600 billion, a loss of approximately $300 billion from its peak [1]. - Following a significant order with OpenAI worth $100 billion, Oracle's stock initially surged, bringing its market value close to $1 trillion [1]. Group 2: Debt and Credit Default Swaps (CDS) - According to Morgan Stanley, Oracle's debt risk indicators reached a three-year high in November, raising concerns about the company's ability to manage its large-scale AI expenditures [1][2]. - The cost of Oracle's five-year credit default swaps (CDS) has surged to 1.25 percentage points, more than tripling in recent months, with potential to exceed 1.5 percentage points if communication regarding financing strategies remains limited [2]. - Barclays reported that Oracle's CDS trading volume skyrocketed to approximately $5 billion over seven weeks, compared to just over $200 million in the same period last year [3]. Group 3: Financing and Investment Strategy - Oracle has been actively involved in the AI investment race, borrowing $18 billion in the high-grade bond market in September and securing another $18 billion in project financing for a data center in New Mexico [3]. - The company aims to provide the lowest upfront costs and fastest profit paths in the hyperscale data center market, positioning itself as a tenant rather than an owner [3]. - Oracle projects that its cloud infrastructure revenue will grow to $166 billion by fiscal year 2030, accounting for approximately 75% of total sales of $225 billion [3]. Group 4: Management's Response - Oracle's CFO Doug Kehring addressed concerns about the AI bubble, emphasizing that the company is focused on opportunities with clear market profit returns rather than merely pursuing revenue [4].