A Bad Week for Oracle Stock Got Even Worse on Friday. Here's Why

Core Insights - Oracle faced a challenging week, culminating in a report of a one-year delay in delivering data centers for OpenAI due to material and labor shortages [1][2] - The company's stock fell 4.5% on Friday, marking a nearly 13% decline for the week, following disappointing quarterly earnings [2][3] - Oracle's heavy borrowing to compete in the cloud computing space raises concerns among investors about its ability to manage debt if AI demand does not meet expectations [4][5] Company Performance - Oracle's shares dropped significantly after the announcement of delays in data center deliveries for OpenAI, with the stock reaching levels not seen since June [2][6] - The company reported quarterly earnings that fell short of market expectations, leading to a more than 10% drop in stock value on Thursday [3][6] - Despite the setbacks, Oracle maintains that all milestones related to its commitments remain on track [3] Industry Context - Oracle is aggressively investing in AI infrastructure to compete with major cloud computing players like Microsoft, Alphabet, and Amazon, but unlike its competitors, it is relying heavily on borrowing [4] - OpenAI represents a significant portion of Oracle's cloud computing backlog, accounting for $300 billion, but the startup is not expected to become profitable until the end of the decade [5] - The future revenue realization from OpenAI is contingent on the latter's ability to secure funding from investors or lenders [5]