Oracle’s collapsing stock shows the AI boom is running into two hard limits: physics and debt markets

Core Insights - Oracle's stock has dropped 45% since its September peak, with a 14% decline in the past week due to disappointing earnings and high capital expenditures of $12 billion, exceeding analyst expectations of $8.25 billion [1][3] Financial Performance - The company's earnings guidance was weak, with an additional $15 billion added to its fiscal 2026 capital expenditure forecast, primarily for data centers supporting OpenAI, Oracle's $300 billion partner in the AI sector [2] Revenue Concerns - Investors are concerned about Oracle's ability to finance its significant capital outlays, as its cloud revenue and cloud-infrastructure sales fell short of Wall Street expectations, leading analysts to describe its AI expansion as debt-fueled [3] Project Delays - Oracle has delayed the completion of some U.S. data centers for OpenAI from 2027 to 2028 due to labor and material shortages, highlighting the challenges of aligning rapid digital growth with physical infrastructure development [4] Industry Challenges - The industry faces a disparity between the rapid deployment of capital and the lengthy timelines for acquiring necessary equipment, such as turbines and transformers, which can take several years to procure [5]