Oracle Slides 60% From High as $55.7 Billion AI Spend and Debt Stir OpenAI Fears
Updated
Updated · The Motley Fool · Jul 20
Oracle Slides 60% From High as $55.7 Billion AI Spend and Debt Stir OpenAI Fears
3 articles · Updated · The Motley Fool · Jul 20
Summary
Oracle shares have fallen more than 60% from their peak and roughly halved over the past 12 months as investors question whether its AI buildout will generate adequate returns.
The concern centers on spending and leverage: fiscal-year capital expenditures jumped to $55.7 billion from $21.2 billion, while long-term liabilities rose to $176.9 billion from $114.7 billion.
OpenAI exposure has added to the pressure after Oracle signed a $300 billion cloud deal last year, with investors wary of the customer's profitability challenges and intensifying competition.
Oracle still posted strong recent earnings growth, and the stock now trades below 16 times forward earnings versus about 22 for the S&P 500, leaving a potential contrarian case if AI investments pay off.