Oracle Shares Crash 65% as $55.7 Billion AI Capex Stokes Debt and OpenAI Fears
Updated
Updated · The Economic Times · Jul 20
Oracle Shares Crash 65% as $55.7 Billion AI Capex Stokes Debt and OpenAI Fears
3 articles · Updated · The Economic Times · Jul 20
Summary
Oracle shares have fallen 65% from their peak even after the company posted record Q4 and FY26 results, underscoring how sharply investors have turned against its AI-infrastructure strategy.
$55.7 billion in FY26 capital spending—above Oracle’s earlier $50 billion target—and plans to raise more debt in 2027 have fueled doubts that cloud growth will generate returns strong enough to support the balance sheet.
Oracle Cloud Infrastructure revenue rose 93% in the quarter and remaining performance obligations reached $638 billion, but investors are questioning how much of that backlog depends on a small number of AI customers, especially OpenAI.
Credit pressure has added to the selloff after a rating cut from BBB cited heavy infrastructure spending and OpenAI exposure, reinforcing a broader market shift from rewarding AI demand to demanding proof of profits and cash flow.