Core Viewpoint - Oracle Corporation's stock experienced a significant decline of up to 11.5% in premarket trading following the release of its Q2 2026 earnings report, which did not meet Wall Street's expectations [1][2]. Financial Performance - Oracle's revenue for Q2 2026 was reported at $16.06 billion, slightly below the forecast of $16.21 billion [2]. - The adjusted EPS guidance for Q3 2026 was set between $1.64 to $1.68 per share, falling short of the estimated $1.72 [3][5]. - Despite beating EPS estimates with a reported $2.26, the revenue miss was perceived as a significant failure [5]. Capital Expenditure Concerns - Oracle announced a sharp increase in capital expenditure (CapEx) for fiscal 2026 by an additional $15 billion, raising the total expected outlay to $50 billion [3]. - The increase in CapEx is aimed at building new data centers and acquiring necessary computing hardware, essential for fulfilling a backlog of AI contracts that surged 438% to a record $523 billion [7][8]. - Investors expressed concerns over rising debt levels, as Oracle's long-term debt increased by 25% over the past year, nearing $100 billion [8]. Market Reaction and Broader Implications - The sell-off in Oracle's stock triggered a ripple effect, wiping out over $70 billion in market value across the AI sector, impacting major companies like Nvidia, Microsoft, Meta, and AMD [2][4][12]. - The market's reaction highlights the sensitivity of the AI-driven economy, where companies are expected to deliver flawless performance [5][9]. - The decline in Oracle's shares indicates that Wall Street is treating the AI sector as an interdependent entity, amplifying the impact of any single company's financial issues [12].