Oracle(US:ORCL) Prnewswire·2026-02-10 13:15Core Viewpoint - Oracle Corporation is facing a class action lawsuit due to alleged misleading statements regarding its AI infrastructure strategy and its financial implications, leading to significant stock price declines during the class period from June 12, 2025, to December 16, 2025 [1]. Allegations - The lawsuit claims that Oracle's executives made false statements about the company's AI infrastructure strategy, which would lead to increased capital expenditures without corresponding revenue growth [1]. - It is alleged that Oracle's increased spending poses risks to its debt, credit rating, free cash flow, and project funding capabilities [1]. - A warning from S&P Global Ratings indicated that OpenAI could account for over one-third of Oracle's total revenues by fiscal 2028, raising concerns about Oracle's reliance on OpenAI's performance [1]. - Following negative analyst coverage and disappointing financial results, Oracle's stock price experienced significant declines, including a nearly 11% drop after the announcement of second-quarter results for fiscal year 2026 [1]. Financial Impact - On September 25, 2025, Rothschild & Co. Redburn initiated coverage of Oracle with a "Sell" rating and set a price target of $175, indicating a potential 40% decline from its previous price [1]. - Oracle reported negative free cash flow exceeding $10 billion for the second quarter of fiscal year 2026, which was below analysts' expectations [1]. - Delays in the completion of data centers for OpenAI due to labor and material shortages further contributed to concerns about Oracle's revenue growth [1]. - A report on December 17, 2025, indicated that Blue Owl Capital withdrew funding for a $10 billion data center project, exacerbating fears about Oracle's financial commitments and rising debt levels [1].