Track market-moving stories before they get noisy

The Pentagon on Thursday announced a contract with Oracle worth almost $7 billion over a decade, a big win for the software maker, which has been punished by investors this year. The stock rose about 3% in extended trading.

The contract covers the use of Oracle software in on-premises data centers for branches of the military, the U.S. intelligence community and the Coast Guard, according to a statement. The Central Intelligence Agency was Oracle's first customer.

Kirsten Davies, the Department of Defense's chief information officer, said in the release that the agency is saving at least $441 million for taxpayers "by fundamentally improving how we procure on-premises Oracle capabilities."

Earlier this week, Defense Secretary Pete Hegseth estimated that the war in Iran, which began in February, has cost the U.S. $37.5 billion.

Oracle co-founder Larry Ellison has long been a supporter of President Donald Trump, reportedly contributing $45 million to a nonprofit backing Trump's 2024 presidential campaign.

Ellison was among the first guests to appear in the White House during Trump's second term, announcing plans for Stargate artificial intelligence data centers in the U.S. Trump supported Oracle taking a stake in TikTok's U.S. business, and in May, the Defense Department announced agreements with Oracle and other tech companies around AI deployments in classified networks.

Still, Oracle shares are down 38% this year, as investors have grown concerned that AI could hurt growth prospects for software incumbents. The company is also racking up tens of billions of dollars in debt to build out AI data centers.

Oracle said in June that quarterly software revenue declined 2% from a year earlier, though the company's database software is widely used inside large companies. Cloud revenue climbed 47% as the company rushes to supply AI computing power to OpenAI and other clients.

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Ten months ago, Oracle (ORCL -1.68%) looked unstoppable. The company had become one of Wall Street's biggest AI winners as investors bet its cloud infrastructure business would play a central role in powering AI workloads. The stock surged to record highs, briefly pushing co-founder Larry Ellison's net worth above $400 billion.

Today, the story looks very different. Oracle shares have fallen by more than 50% from their peak, wiping roughly $213 billion from Ellison's personal fortune as the market has begun to question the company's aggressive AI data center spending.

The stock is now sitting at levels it hasn't seen since April 2025. So is this a good buying opportunity? 

Why Oracle fell Demand for Oracle Cloud Infrastructure remains strong. The company continues to sign large infrastructure contracts and expand its data center capacity. In fact, its remaining performance obligations reached a record $638 billion as of May 31, the end of its fiscal 2026.

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The problem is that building AI data centers isn't cheap. Oracle dramatically increased capital spending to expand its cloud infrastructure. Capital expenditures topped $21 billion in fiscal 2026, up from about $7 billion a year earlier, and management says it expects to spend more than $25 billion in fiscal 2027. That begs the question: Will those investments generate attractive returns quickly enough to justify these mounting costs?

Those concerns intensified after S&P Global Ratings downgraded Oracle's credit rating to BBB-, just one notch above junk status. That's not a trivial development, because a lower credit rating translates into higher borrowing costs, which will make its already capital-intensive expansion strategy even more expensive. Investors are right to have concerns.

The long-term case remains intact Despite the sell-off, Oracle's underlying business hasn't suddenly broken. The cloud infrastructure unit remains one of the fastest-growing parts of the company, and demand for AI computing capacity continues to outstrip supply across much of the industry.

Image source: Getty Images.

Oracle has also carved out a unique competitive position. Rather than competing directly against Amazon Web Services, Microsoft Azure, and Alphabet's Google Cloud, Oracle increasingly partners with them.

That strategy broadens the company's addressable market while reinforcing its dominance in enterprise databases. Oracle's large backlog of signed cloud contracts also provides it with significant revenue visibility over the coming years.

Is it a buy? If you're looking for a stock that will rebound and surge over the next quarter, Oracle may not be your best choice. Investor sentiment regarding the company has clearly deteriorated, and concerns surrounding its AI infrastructure spending aren't likely to disappear overnight.

If you have a long time horizon as an investor, however, this is not a stock to ignore. Oracle is making enormous investments because management believes AI infrastructure demand will continue growing for years. If that thesis proves correct, today's elevated spending could eventually translate into significantly higher cloud revenue and cash flow.

Of course, there's still risk. If enterprise AI adoption slows, Oracle could find itself in possession of billions of dollars of expensive infrastructure that takes longer than expected to generate attractive returns.

That's why I wouldn't call Oracle a screaming bargain. But I also wouldn't dismiss it because of a difficult 10-month stretch. The market has gone from pricing Oracle as though nothing could go wrong to assuming almost everything will. Reality will likely fall somewhere in between.

Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Oracle, and S&P Global. The Motley Fool has a disclosure policy.

The past few weeks have seen the bond market start asking a question the stock market has mostly been happy to ignore: Who can actually afford the AI buildout?

On July 9, S&P Global Ratings gave its answer for one of the biggest spenders. It cut Oracle Corp.'s NYSE: ORCL long-term credit rating to BBB-, the lowest rung of investment grade and just one notch above junk.

The stock has since fallen to around $125, down nearly 30% over the past month and nearly 50% over the past year.

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Oracle Corporation (ORCL) Price Chart for Tuesday, July, 21, 2026

What makes the downgrade worth more than a passing glance is what it reveals about the wider group. Every major AI spender is pouring money into building out their supply capabilities, but they're all doing it from different financial positions, and the gap between them is widening fast.

The Downgrade Isn't Really About Oracle's BusinessOracle Today

$124.98 +3.60 (+2.97%)

As of 09:58 AM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$120.03▼

$345.72Dividend Yield1.60%

P/E Ratio21.51

Price Target$265.03

S&P's reasoning for the Oracle downgrade was blunt.

The agency admitted it had underestimated the scale of investment required for Oracle's AI ambitions, and now expects the company's free operating cash flow deficit to widen to roughly $42 billion in fiscal 2027, nearly double its earlier forecast.

The other red flag was customer concentration. S&P estimates that around half of Oracle's $638 billion in remaining performance obligations is tied to OpenAI alone, and it described that single relationship as a key credit risk.

The concern is understandable—Oracle has taken on long-term commitments on facilities and equipment to serve OpenAI's demand, so even if the latter's payments were to slow, Oracle's obligations would still need to be paid in full.

Where Each Spender Actually SitsSo what does that mean for Oracle's peers? Well, if you put the four biggest AI spenders side by side, then the divide becomes obvious.

The top two are Microsoft Corp. NASDAQ: MSFT, which carries an AAA rating, and Alphabet Inc. NASDAQ: GOOGL, which carries an AA+ rating. Next up is Amazon.com Inc. NASDAQ: AMZN, still at the higher end of the scale at AA, while Oracle sits alone down at BBB-.

The uncomfortable answer to the question, though, is that none of them can fully fund this from existing cash generation anymore. All four have seen their free cash flow compressed dramatically by the scale of the spending, and all four have been active issuers in the bond market to help cover the gap. What separates them isn't whether they borrow, but how heavily they're leaning on it, and how much of the repayment depends on revenue that hasn't arrived yet.

The Headroom GapMicrosoft and Alphabet started this cycle with the strongest balance sheets and the most cushion, which is why they still sit near the top of the ratings scale despite spending heavily. Amazon is only just holding on to its positive free cash flow. Still, its accelerating AWS growth is giving investors a reason to stay cautiously bullish on the spending for now.

Oracle is the only one, so far, that seems to have run out of room, and its move into negative free cash flow is a bright red flag. The leverage numbers underscore the point: Oracle sits several times above Amazon on debt-to-equity and nearly 20 times above Alphabet, which is actually running a net cash position.

More importantly, it has no rating cushion left, whereas its peers have several notches to go before their own credit standing comes under real pressure.

Why the Funding Gap MattersOverall MarketRank™100th Percentile

Analyst RatingModerate Buy

Upside/Downside118.3% Upside

Short Interest LevelHealthy

Dividend StrengthModerate

News Sentiment0.51 Insider TradingSelling Shares

Proj. Earnings Growth35.70%

See Full Analysis

This distinction appears in three places that directly impact shareholders. The first is increased interest expense. Oracle's higher risk profile means that every additional dollar of debt costs more than it would for its better-rated peers, which will hurt its profitability.

The second is a lower likelihood of buybacks. Companies generating strong free cash flow, like Alphabet, can keep buying back their shares while continuing to invest in growth, whereas negative free cash flow will make it far more difficult for Oracle to do the same.

The third is what happens if demand for AI cools. A company funding most of its capital expenditure from operations can simply spend less and wait. A company funding itself predominantly with debt still owes the money it's borrowed, regardless of whether the expected revenue arrives, and its valuation becomes far harder to defend when investors start to doubt it will.

So Who Can Actually Afford It?Line the four up against the question, and a clear order emerges. Microsoft and Alphabet are best positioned to fund this from what the business itself generates, with the strongest balance sheets, the lowest leverage, and, in Alphabet's case, more cash than debt.

Amazon sits in the middle. It's spending more than anyone, and its cash generation is stretched thin as a result. Still, the accelerating growth at AWS suggests the money is meeting existing demand rather than demand it's hoping to create.

Oracle is the outlier on both halves of the question. It's leaning hardest on borrowing and on revenue that hasn't arrived yet, with a backlog that has to convert and a single customer accounting for around half of it. That combination is why it's the only one of the four with no rating cushion left.

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Oracle (NYSE:ORCL | ORCL Price Prediction) trades at $124.21 against a consensus Wall Street price target of $251.85, a gap of roughly 103%.

Oracle sells database and enterprise software, but the cloud story dragged the stock up and then down. Over the last two years the company reinvented itself as a hyperscale landlord chasing AI training and inference workloads, embedding 72 multicloud datacenters inside Amazon, Google, and Microsoft. That pivot put Oracle on every generalist’s radar and is why the recent decline matters. Analysts built their bullish thesis on a $638 billion contracted backlog, and the market has spent the last month acting as if that backlog is not there.

Why a Cloud Darling Just Lost a Third of Its Value in a Month Oracle has fallen 33.43% over the past month and 35.29% year to date, closing within a rounding error of the $123.66 52-week low. S&P cut Oracle’s credit rating to BBB-, one notch above junk, citing debt implications of massive AI infrastructure spending and concentration risk tied to OpenAI. Two days later, IBM cratered on a software miss that Bloomberg tied to enterprise budgets shifting from software into AI servers, dragging every large-cap software name lower.

The underlying anxiety is cash. Free cash flow for FY2026 came in at negative $23.69 billion on $55.66 billion of trailing capex, and management expects another ~$70 billion capex outlay in FY2027 plus a ~$40 billion debt and equity raise. A New Mexico pipeline permit denial and nationwide protests around data-center energy use added execution risk.

The Case Guggenheim Is Still Making at Three Times the Current Price Guggenheim’s John DiFucci has kept a $400 price target on Oracle and named it his best software idea for 2026, implying upside that more than triples the current share price and sits well above the Street average. His core argument is that there is “no apparent good reason” for the pullback and anxiety over near-term margin compression is drowning out an unprecedented backlog signal.

Remaining performance obligations exploded to $638 billion, up 363% year over year. Cloud infrastructure revenue grew 93% in the June quarter, cloud is now 52% of total revenue, and management reconfirmed a $90 billion FY2027 revenue target with $8.05 in non-GAAP EPS. CFO Hilary Maxson told analysts the “unprecedented level of RPO provides exceptional visibility into our future revenue growth”, with steady-state ROIC in the high 20s at the project level.

DiFucci’s timeline is the piece the market seems least willing to underwrite. He expects free cash flow to rebound dramatically starting in fiscal 2029 as front-loaded infrastructure spend converts into recurring, high-margin revenue. Consensus already reflects broad agreement on direction if not magnitude:

Strong Buy: 8 Buy: 29 Hold: 5 Sell: 1 How the Cloud Software Peer Group Stacks Up Every large-cap enterprise software name has sold off this year, but Oracle has fallen furthest and carries the widest analyst-implied gap.

Microsoft (NASDAQ:MSFT) is down 16.69% year to date to $401.10, well behind Oracle’s slide. The consensus target of $558.66 implies roughly 39% upside, with ratings overwhelmingly bullish at 54 buy or strong-buy calls against 3 holds and no sells.

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Salesforce (NYSE:CRM) is down 34.47% year to date to $172.68. The consensus target of $245.16 implies about 42% upside, with a ratings mix that skews buy but includes two strong-sell calls.

IBM (NYSE:IBM) trades at $219.05 after a 25.82% one-week drop tied to its Q2 preannouncement. The $283.80 consensus target implies roughly 30% upside, with revisions skewed lower since the miss.

Oracle carries by far the largest analyst-implied upside across the group, signaling either that consensus is behind the curve on risks or that sector rotation has punished Oracle for something the fundamentals do not yet show.

What the Selloff Looks Like Next to the Market Oracle’s 35.29% year-to-date decline compares with a 10.09% gain for the S&P 500, underperforming the index by more than 45 points in seven months. The stock trades on a forward P/E of 16 against a trailing 23, with a PEG of 0.74. The average target of $251.85 implies roughly 103% upside, and analyst revisions and the trailing five-year total return of 52.77% both point to a market that has priced Oracle for a slower ramp than management is guiding to.

The Investment Case The bull case holds if the RPO conversion story arrives on management’s schedule and the FY2029 free-cash-flow inflection Guggenheim models shows up on time. The path back to consensus runs through steady quarterly proof that OCI margins hold at the 30% to 40% range, GPU utilization stays near 97.5%, and the balance sheet absorbs the $40 billion raise without another downgrade.

The bear case sharpens if the credit market keeps flashing yellow. A second S&P notch would take Oracle to junk, force selling from investment-grade mandates, and reprice the entire capital plan. Concentration risk in the OpenAI relationship, permit fights around data centers, and customer defections toward in-house AI tools are real risks that chip at the recurring-revenue premium the bull case demands.

On balance the dislocation looks larger than the underlying deterioration. The setup rewards investors with a tolerance for another leg down while the FY2029 cash-flow thesis proves itself.

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The share price of Oracle (ORCL +2.79%) has plunged more than 60% from its 52-week high, and the stock currently trades at $136. This reflects investor concerns around the heavy capital spending to support the company's data center build-out, but it's difficult to overlook the level of demand in Oracle's cloud business.

Cloud revenue growth has accelerated from 28% year over year in the August-ending fiscal first quarter to 47% growth in the fiscal fourth quarter. Demand for artificial intelligence (AI) services drove a 93% increase in the cloud infrastructure business last quarter. While there are risks, the disconnect between cloud growth and its stock price presents a compelling opportunity for investors.

Image source: The Motley Fool.

Oracle's cloud advantage Oracle's momentum reflects a key competitive advantage in the cloud market: data security. Enterprises want to use AI to boost productivity, but it's also essential that they keep their data private and secure when using AI models from OpenAI, Anthropic, and others.

Its cloud infrastructure is differentiated from other hyperscalers through its secure data-isolation architecture. This separates the cloud control computers from the customer's compute nodes. This allows an enterprise to control its data behind its own firewall, which seems to be a key selling point driving greater demand for Oracle's cloud business.

Oracle provides the data center infrastructure for AI training and inference, along with industry expertise for running enterprise software. It essentially serves as the customer's digital hub.

CEO Mike Sicilia hinted at a huge opportunity for Oracle: "We're on the front end of one of the most interesting times in the technology business." Oracle's cloud revenue trajectory in recent quarters suggests that customers are moving past the testing stage of AI and actively implementing it to run their businesses.

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Growth and value outweigh the risks Building data centers is capital-intensive. Oracle's capital expenditures are growing faster than the cash it is generating from operations. It has also issued more debt to fund its data center build-out. Its total debt has increased by $57 billion over the last year, while its free cash flow has tanked to negative $23.7 billion on a trailing 12-month basis.

The lower free cash flow and higher debt load have raised concerns around Oracle's financial health. However, the company's debt-to-equity ratio has declined from 5.3 to 3.9. This shows Oracle shifting from a debt-heavy business to an asset-heavy one focused on owning data center infrastructure for an AI-driven economy.

Importantly, Oracle is not spending without contracts in place. Remaining performance obligations, which are contracted revenue, ended the quarter at $638 billion. Once the data center infrastructure is in place and Oracle fulfills this demand, earnings and free cash flow should grow significantly.

The stock's forward price-to-earnings multiple has dropped to 17, while analysts have raised their earnings growth estimates to 28% annually over the next few years. The stock looks undervalued, but, of course, the shares could hit new lows before rebounding.

A slowdown in data center spending is a risk that would likely pressure the stock. But from a long-term perspective, the company's advantages in the cloud market and lower valuation could deliver outstanding compounding returns for investors.

The first 2X short ETFs on Applied Optoelectronics and Oracle are now available

Funds represent first-to-market inverse strategies on Applied Optoelectronics and Oracle Corporation

, /PRNewswire/ -- Tradr ETFs, a provider of ETFs designed for sophisticated investors and professional traders, today launched two new leveraged ETFs on the stocks of Applied Optoelectronics and Oracle Corporation. The Cboe-listed funds seek to deliver two times short (-200%) the daily performance of their underlying target stocks.

The following ETFs are expected to open for trading today:

Tradr 2X Short AAOI Daily ETF (Cboe: AAOZ) – tracks Applied Optoelectronics, Inc. (Nasdaq: AAOI) Tradr 2X Short ORCL Daily ETF (Cboe: ORCZ) – tracks Oracle Corporation (NYSE: ORCL) The launch follows the strong adoption of the Tradr 2X Long AAOI Daily ETF (AAOX), which began trading on March 24, 2026, and has grown to over $275 million in assets under management. AAOZ now provides active traders with a complementary tool for expressing bearish views or hedging existing positions in Applied Optoelectronics.

"Both Applied Optoelectronics and Oracle have become important AI infrastructure narratives, but they're driven by very different catalysts and can experience significant price swings," said Matt Markiewicz, Head of Product and Capital Markets at Tradr ETFs. "AAOZ and ORCZ give sophisticated traders efficient tools to capitalize on downside opportunities or hedge long exposure without using margin or options. As volatility around AI-related stocks continues, we expect demand for both bullish and bearish trading vehicles to remain strong."

With today's launches, Tradr currently has 74 leveraged ETFs in its lineup. Its strategies can be accessed through most brokerage platforms and allow investors to avoid the hassle of using margin and the complexity of options trading. The firm continues its mission of providing sophisticated investors with innovative trading tools that enhance their ability to express market views with precision and efficiency.

For detailed information on Tradr ETFs and the significant risks involved with leveraged ETFs, please visit www.tradretfs.com.

About Tradr ETFs

Tradr ETFs are designed for sophisticated investors and professional traders who are looking to express high conviction investment views. The strategies include leveraged and inverse ETFs that seek short or long exposure to actively traded stocks and ETFs.

IMPORTANT RISK INFORMATION

Tradr ETFs are for sophisticated investors and professional traders with high conviction views and are very different from most other ETFs. The Funds are intended to be used as short-term trading vehicles and pursue leveraged investment objectives, which means they are riskier than alternatives that do not use leverage because the Funds magnify the performance of their underlying security. The volatility of the underlying security may affect a Fund's return as much as, or more than, the return of the underlying security.

Investors in the fund should: (a) understand the risks associated with the use of leverage; (b) understand the consequences of seeking inverse and leveraged investment results; (c) for short ETFs, understand the risk of shorting; (d) intend to actively monitor and manage their investment. Fund performance will likely be significantly different than the benchmark over periods longer than the specified reset period and the performance may trend in the opposite direction than its benchmark over periods other than that period.

Leverage increases the risk of a total loss of an investor's investment, may increase the volatility of the Funds, and may magnify any differences between the performance of the Funds and their reference security. The Funds seek leveraged investment results for a specific period (daily, monthly or quarterly). The exact exposure of an investment in the Fund intra-period will depend upon the movement of the reference security from the end of the prior period until the time of investment by the investor.

The Fund will not attempt to position its portfolio to ensure it does not gain or lose more than a maximum percentage of its net asset value on a given trading day. As a consequence, investors in a Fund that seeks two times daily performance would lose all of their money if the Fund's underlying security moves more than 50% in a direction adverse to the Fund on a given trading day.

ETFs involve risk including possible loss of the full principal value. There is no assurance that the Fund will achieve its investment objective. Principal risks and other important risks may be found in the prospectus. Past performance does not guarantee future results.

ETF shares are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. There can be no guarantee that an active trading market for ETF shares will develop or be maintained, or that their listing will continue or remain unchanged. Buying or selling ETF shares on an exchange may require the payment of brokerage commissions and frequent trading may incur brokerage costs that detract significantly from investment returns.

Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds. This and other important information about the Fund is contained in the Prospectus, which can be obtained by visiting www.tradretfs.com. The Prospectus should be read carefully before investing.

Distributed by ALPS Distributors, Inc, which is not affiliated with AXS Investments or its Tradr ETFs. AXI000994

SOURCE Tradr ETFs

New no-code and pro-code capabilities enable customers and partners to build Fusion Agentic Applications backed by specialized agent teams, Fusion business objects, workflows, approvals, governance, and auditability

With the new AI Studio Skill, developers can now use familiar tools such as VS Code, OpenAI Codex, Claude Code, CLIs, and Git to build agentic applications within the same Fusion-native framework for governance that Oracle uses

, /PRNewswire/ -- Oracle today announced a new AI-native builder experience for Oracle AI Agent Studio for Fusion Applications that enables customers and partners to create and run Fusion Agentic Applications natively within Oracle Fusion Cloud Applications. Fusion Agentic Applications represent a new class of enterprise application: outcome-driven systems backed by teams of specialized AI agents that reason, coordinate, and decide, then execute work through Fusion business objects, workflows, tools, policies, approvals, and logged actions.

Unlike standalone agents, copilots, or disconnected AI automation tools, Fusion Agentic Applications are designed to operate inside the enterprise system where the work already happens. They run natively in Oracle Fusion Applications, inherit Fusion security and governance controls, act against Fusion business objects and workflows, and provide the auditability required for enterprise execution.

The new builder experience brings no-code, low-code, and pro-code development into one Fusion-native framework. Business users can start with natural language using the Agentic Applications Builder, while developers and partners can use the new AI Studio Skill to build with Visual Studio Code, standard command-line interfaces, Git-based workflows, and AI coding agents or assistants including Codex and Claude Code. This will help builders with all levels of experience create AI-native systems that execute enterprise work with built-in security, governance controls, and auditability.

"Enterprise software is moving beyond systems that record work to systems that actively drive and execute outcomes," said Chris Leone, executive vice president, Applications Development, Oracle. "With this new builder experience, customers and partners can build Fusion Agentic Applications that are backed by specialized agent teams and run natively inside Oracle Fusion Applications, where the business objects, workflows, security, approvals, and auditability already exist. This is fundamentally different from building disconnected AI automations and then trying to bolt on enterprise controls later."

Fusion Agentic Applications are not AI wrappers around enterprise software. They are complete business applications designed around specific outcomes, such as accelerating financial close, improving collections, reducing service escalations, optimizing workforce operations, or streamlining supply chain execution.

With Oracle AI Agent Studio for Fusion Applications, organizations can build, connect, execute, and run AI automation and agentic applications using reusable Oracle, partner, and external agents.

In addition, this native runtime approach addresses one of the biggest barriers to enterprise AI adoption: moving from prototype to production. When AI applications are built outside the enterprise system, organizations must separately solve identity, data access, approvals, audit trails, observability, governance controls, and lifecycle management. With Fusion Agentic Applications, those capabilities are built into the runtime from the start.

The new capabilities, integrations, and AI Studio Skill create a unified builder experience spanning natural language no-code, low-code, and pro-code development. The latest updates enable organizations to:

Create complete agentic applications, not just standalone agents: Helps builders create outcome-driven Fusion Agentic Applications backed by specialized agent teams, user experiences, workflows, tools, policy controls, approvals, and runtime assets that operate together as one application. Deploy natively in Oracle Fusion Applications: Helps organizations run agentic applications inside Oracle Fusion Applications without separate runtimes, external orchestration layers, or custom infrastructure. Agentic applications can execute against Fusion business objects and workflows while inheriting Oracle Fusion Applications' security, governance controls, approvals, and auditability controls. Build with modern developer tools: Helps developers and partners build AI agents and agentic applications faster using the AI Studio Skill with familiar tools and workflows. Developers can use Visual Studio Code, standard CLIs, and AI coding assistants such as Codex, Claude Code, and other Oracle tools, alongside Git-based lifecycle management, local validation, debugging, and CI/CD workflows. Access reusable developer resources: Helps developers and partners accelerate agentic application development with ready-to-use assets and implementation guidance. A new public GitHub repository will provide templates, starter projects, sample applications, reusable assets, and reference architectures to help teams build and validate Fusion Agentic Applications faster. Connect agents with an open execution system: Helps enterprise teams coordinate work across Oracle, partner, third-party, and custom agents while inside the security and governance controls of Oracle Fusion Applications. Support for agent-to-agent interoperability patterns enables Oracle AI Data Platform agents, third-party agents, and custom-built agents to participate with the same capabilities as Fusion Agentic Applications. Access a growing AI ecosystem: Helps customers and partners extend enterprise processes using reusable agents, workflows, connectors, templates, and agentic applications. Oracle AI Agent Marketplace, part of Oracle AI Agent Studio for Fusion Applications, is expanding to support a catalog of agentic applications in addition to the existing portfolio of AI agents. Lastly, there are now over 80,000 certified experts trained in Oracle AI Agent Studio to help organizations build, test, deploy, and manage AI across the enterprise. Available at no additional cost, Oracle AI Agent Studio for Fusion Applications delivers easy-to-use tools, including orchestration, advanced testing, robust validation, and built-in security to help Oracle Fusion Applications customers and partners create and manage AI agents and agentic applications. By leveraging the same platform Oracle uses to create its own AI agents and Fusion Agentic Applications, customers and partners can extend the 1,000-plus AI agents delivered through Fusion Applications and the 22 new Fusion Agentic Applications that were launched earlier this year, create new ones, and deploy them as Fusion runtime artifacts across the enterprise.

Industry Validation

"Enterprise AI is moving fast, and our clients need a trusted partner that can rapidly unlock the full value of Oracle's embedded AI," said Lan Guan, chief AI and Data officer, Accenture. "Oracle's new builder experience meets developers where they already work, while Accenture helps clients turn on, govern, and scale these AI-powered capabilities. Together, we're helping clients move from AI potential to enterprise-wide impact—faster and with greater confidence than ever before."

"Oracle is redefining the next-generation application platform for the AI era by combining application, platform, and agentic capabilities in a single builder experience for professional and low-code developers," said Holger Mueller, vice president and principal analyst, Constellation Research. "Unlike alternative approaches that build agents outside the application platform, Oracle keeps agents, security, APIs, access, and governance all within a well-defined, trusted, and proven modern application platform."

"Enterprise clients are looking for pragmatic ways to move AI from pilots into production. The challenge is often not the technology itself, but how to integrate it into core business operations with appropriate security, oversight, and operational controls," said Mauro Schiavon, global chief commercial officer, Oracle Business, Deloitte Consulting LLP. "By enabling organizations to create agentic applications within the existing controls and workflows of Oracle Fusion Applications, Oracle can help bridge that gap, support faster execution, and help improve operational efficiency while maintaining the control and oversight enterprises expect."

"Oracle is pushing AI beyond copilots and advisors to deliver agentic systems that optimize process flows and execute work inside enterprise applications. Oracle's latest expansion of its AI Agent Studio and Marketplace leverages client-built agent guidance and governance to make agent creation and development possible for permitted workers regardless of their technical skills and abilities," said Zachary Chertok, senior research manager for HCM applications and agents, IDC. "Working from trusted governance, permissions management, systems controls, and data access management means that organizations can enable employees to build, configure, and support themselves and their teams with the agents they need to collaborate, innovate, and drive toward quality outcomes."

"Organizations are eager to unlock the potential of agentic AI in their business applications," said Kevin Sullivan, Oracle global alliance leader, PwC. "By building agentic capabilities natively into Fusion Applications, Oracle enables secure, governed, real-time actions at scale, helping organizations move from experimentation to adoption with greater confidence. Combined with PwC's deep industry expertise, these capabilities help deliver tangible business value with greater reliability and operational oversight."

About Oracle Fusion Cloud Applications
Oracle Fusion Cloud Applications provide an integrated suite of AI-powered cloud applications that enable organizations to execute faster, make smarter decisions, and lower costs. Oracle Fusion Applications include:

Oracle Fusion Cloud Enterprise Resource Planning (ERP): Provides a comprehensive suite of AI-powered finance and operations applications that help organizations increase productivity, reduce costs, expand insights, improve decision-making, and enhance controls. Oracle Fusion Cloud Human Capital Management (HCM): Provides a unified AI-powered HR platform that connects all people-related processes and data to help organizations automate tasks throughout the employee lifecycle, improve the employee experience, and give HR leaders actionable workforce insights. Oracle Fusion Cloud Supply Chain & Manufacturing (SCM): Provides a unified AI-powered platform that integrates supply chain and operations processes and helps organizations enhance resilience and quickly adapt to market changes. Oracle Fusion Cloud Customer Experience (CX): Provides a suite of AI-powered applications that help organizations manage marketing, sales, and service processes to win business, build stronger customer relationships, and improve customer experiences. About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.

Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.

SOURCE Oracle

A month has gone by since the last earnings report for Oracle (ORCL - Free Report) . Shares have lost about 21.7% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Oracle due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Oracle Corporation before we dive into how investors and analysts have reacted as of late.

Oracle Q4 Earnings Beat Estimates, Cloud Growth Fuels RevenuesOracle reported fourth-quarter fiscal 2026 non-GAAP earnings of $2.11 per share, which beat the Zacks Consensus Estimate by 7.65% and surged 24% in dollar terms and 23% in constant currency (cc) on a year-over-year basis.

Total quarterly revenues beat the consensus mark by 0.54% and increased 21% year over year to $19.2 billion, reflecting broad-based demand for Oracle's industry-leading cloud technology and applications suites.

Cloud revenues (IaaS + SaaS) increased 47% to $9.9 billion, driven by 93% growth in Cloud Infrastructure (IaaS), and 10% growth in Cloud Applications (SaaS). This represents a notable acceleration in cloud infrastructure growth compared to prior quarters, signaling unprecedented demand from AI-focused customers.

Oracle's Remaining Performance Obligations ended the fourth quarter at $638 billion, up 363% from the prior year and $85 billion sequentially from the end of the fiscal third quarter. Most of the RPO increase in both the fiscal third and fourth quarters was large-scale AI contracts where the customer prepaid Oracle for the purchase of the GPUs, or the customer bought and supplied the GPUs to Oracle. This substantial backlog provides remarkable visibility into future revenue growth.

ORCL's Q4 Top-Line DetailsCloud Infrastructure revenues (IaaS) surged 93% in USD and 92% in cc to $5.8 billion, marking another dramatic acceleration from the fiscal third quarter's 84% growth rate. Cloud Application revenues (SaaS) were $4.1 billion, up 10% in USD and 9% in cc.

Total cloud revenues (SaaS plus IaaS) surged 47% in USD and 46% in cc to $9.9 billion, demonstrating that cloud remains the primary driver of Oracle's growth trajectory. Cloud revenues now represent 52% of total quarterly revenues.

Software revenues were down 2% to $6.8 billion, reflecting customers' continuing migration from on-premise software to the Cloud. Services revenues were $1.5 billion, up 13%, and Hardware revenues were $0.9 billion, up 9%.

Operating Details of OracleOracle generated fourth-quarter GAAP operating income of $6.1 billion, up 20%, while non-GAAP operating income rose to a record $8.6 billion, up 22%, driven by strong revenue growth and operating efficiency actions taken during the quarter.

GAAP net income available to common shareholders reached $4.2 billion, up 23%, and non-GAAP net income available to common shareholders grew to $6.2 billion, up 26%. Fiscal fourth-quarter GAAP earnings per share increased to $1.45, up 21%, and non-GAAP earnings per share climbed to $2.111, up 24%.

ORCL's Balance Sheet & Cash FlowOracle's strong operating income translated to a record fiscal year operating cash flow of $32 billion, up 54%. However, free cash flow was negative $23.7 billion for fiscal 2026 as Oracle continued to execute on investments to support the growth of its Cloud Infrastructure business.

Total notes payable and borrowings stood at approximately $129.5 billion as of May 31, 2026 (current portion of $7.2 billion and non-current portion of $122.3 billion). In fiscal 2026, Oracle raised $43 billion in debt financing and $5 billion in equity financing. In fiscal 2027, Oracle expects to raise approximately $40 billion through a combination of debt and equity financing, including its previously announced $20 billion at-the-market equity issuance.

The board of directors declared a quarterly cash dividend of 50 cents per share of outstanding common stock, consistent with prior quarters.

Forward GuidanceOracle provided the following forward-looking guidance for first-quarter fiscal 2027. Total Revenues are expected to grow from 27% to 29% in both constant currency and USD. Total Cloud revenues are expected to grow between 57% and 63% in constant currency and 58% and 64% in USD. Non-GAAP earnings per share are expected to grow in the range of 16-19% and be between $1.71 and $1.75 in constant currency. Non-GAAP earnings per share are projected to increase 17% to 20% and be between $1.72 and $1.76 in USD.

For fiscal 2027, the company confirmed prior revenue guidance of $90 billion and raised non-GAAP EPS guidance to $8.05, indicating growth of 18% after adjusting for the one-time events of selling its Ampere chip business and Bloom Energy warrants in fiscal 2026.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates revision.

The consensus estimate has shifted 5.31% due to these changes.

VGM ScoresCurrently, Oracle has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Oracle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

SHENZHEN, CHINA - JUNE 13: In this photo illustration, a smartphone displays the logo of Oracle Corporation (NYSE: ORCL), an American technology company specializing in database software, cloud computing services and enterprise software solutions, in front of a screen showing the company's latest stock market chart on June 13, 2026 in Shenzhen, Guangdong Province, China. (Photo illustration by Cheng Xin/Getty Images)

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This article was written by Doug Nathman, with research by his team at Trefis.

Oracle (ORCL) shares have faced a challenging year, declining by -36.9% while the broader market has risen. The cause of this negative sentiment is clear: a substantial investment strategy aimed at expanding its cloud infrastructure. Investors are apprehensive about the expenses, the risks associated with execution, and the influence on short-term profit margins. Yet, the stock's reduced valuation seems to overlook a significant figure that shifts the entire narrative: the company’s Remaining Performance Obligations, or RPO.

This number currently reaches $638 billion, reflecting a remarkable growth of 363% in just one year. It does not represent a prediction or a sales pipeline; rather, it constitutes a significant volume of contractually guaranteed future revenue.

What’s Driving This $638 Billion Backlog?This increase is fueled by overwhelming demand for AI infrastructure. In the most recent quarter, management reported securing $67 billion in AI infrastructure contracts, with most of that being prepaid or involving customers providing their own hardware. This demand is not speculative; it consists of confirmed business from significant players who require Oracle’s cloud solutions to realize their AI ambitions.

How a Backlog Converts to GrowthA substantial RPO offers what investors value most: transparency. Management describes it as exceptional visibility into our projected revenue growth. This backlog underpins the company's forecast for total revenue growth of +34%. It illustrates a clear, contractually-backed trajectory from current bookings to future earnings. For those intrigued by how this specific figure can influence a company’s perspective, another analysis delves into Oracle's upside scenario in greater detail.

The True Narrative Behind The Spending FrenzyThe primary concern for doubters lies in the costs. The company has projected an “anticipated net cash outlay for capital expenditures of approximately $70 billion.” That is indeed a formidable figure. However, the $638 billion RPO directly addresses that apprehension. Oracle is not constructing data centers haphazardly; it is investing to fulfill a significant, pre-sold order backlog. The chances of developing capacity that remains unused are significantly reduced when customers have already committed.

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The market seems to be factoring in the risks associated with spending while not fully accounting for the certainty provided by the backlog. For investors, the key aspect to monitor is straightforward: the consistent conversion of that RPO into recognized revenue, quarter after quarter. This will be the most evident indicator that this underappreciated strength is materializing as anticipated.

This analysis is what the Trefis High Quality (HQ) Portfolio specializes in, managing 30 high-quality businesses, rebalanced with care so no single stock dominates your investment outcome. A strong argument is still just one argument, and a rules-based basket of them frequently outperforms betting everything on a solitary volatile stock. The portfolio has exceeded a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. If an advantage like this merits action, a disciplined home for quality deserves serious consideration today.

Not all hyperscalers are made equal, and some are made less equal than others. Moving on from shamelessly misquoting Orwell, there's a key point here, and it's demonstrated in the chart below. Oracle (ORCL 1.67%) stock declined 24.8% in the first half of 2026, according to data from S&P Global Market Intelligence. Microsoft (MSFT +0.59%) declined by a similar amount, but, interestingly, both Amazon.com and Alphabet, the owner of Google, are in positive territory. Here's why.

Oracle's decline in 2026 There are two themes to explore here. First, the reality is that forecasts for the construction of artificial intelligence (AI) infrastructure have increased throughout the year. That's the main reason AI infrastructure companies like Vertiv and GE Vernova have significantly outperformed the market and the hyperscalers, like Oracle, whose increased capital spending requirements have pressured their stocks in 2026.

The second reason for the decline stems from something it shares with the other hyperscaler in negative territory, Microsoft: significant exposure to the AI model and technology company, OpenAI.

ORCL data by YCharts

Oracle, Microsoft, and OpenAI Microsoft is a major investor in OpenAI, owning about 27% of the company as of the end of March, and earlier in the year, management disclosed that "Approximately 45% of our commercial RPO balance is from OpenAI. "As for Oracle, it and OpenAI signed a landmark $300 billion deal in September 2025. The five-year deal starts in 2027 , in which Oracle will build out AI infrastructure and supply OpenAI with computing power.

Image source: Getty Images.

It was initially well received by the market, but, as the chart below shows, bond markets immediately began pricing in an increased risk of default for Oracle's bonds. For reference, credit default swaps are derivatives that insure the buyer from the risk of a bond's default. They are priced in basis points (whereby 100 basis points equals 1%), so the 170bps pricing of its 5-year bond currently means it costs $17,000 to insure $1,000,000 of Oracle's 5-year debt.

Assuming a 40% recovery rate, the bond market estimates a 2.8% annual default probability and a cumulative default probability of 13.4%. However, the key point is the increase in implied probability after the OpenAI deal.

Data source: S&P Global Market Intelligence. Chart by the author.

Why OpenAI is causing concern Investors are questioning OpenAI's financial projections, with the company expecting to burn through more than $650 billion in cash through 2030. Moreover, its management expects to generate $280 billion in revenue by 2030 after ending 2025 on an annualized revenue run rate of just $20 billion.

While OpenAI may well hit the revenue target and ultimately start generating cash in 2030, , there's a long way to go, it's a competitive market, and it's far from clear whether its AI models will add the value to justify the infrastructure build-out of Microsoft and Oracle. That's why both stocks declined significantly in the first half.

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Vernova, Microsoft, Oracle, and Vertiv. The Motley Fool has a disclosure policy.

Oracle (ORCL +2.39%) is set to be a major beneficiary of the AI infrastructure boom. The company has accumulated a $638 billion backlog of business, which is equal to about eight years of revenue at the current annual run rate. In the most recent quarter alone, $67 billion in new AI infrastructure contracts were signed.

However, it's fair to say that many investors are a little skeptical, with the stock down by more than 55% from its 52-week high. There are two main unanswered questions that seem to be weighing on Oracle's stock price. First, can the companies committing to spend billions with Oracle actually meet these obligations? Second, can Oracle deliver on its backlog while balancing the need to raise capital to do so?

Image source: Getty Images.

Oracle's massive backlog Oracle reported $638 billion in remaining performance obligations, or RPO, in its most recent quarterly report. RPO is Oracle's term for contracted future revenue, or backlog, and this figure is 363% higher than it was a year ago. For context, this is now larger than the backlog of much larger tech company Microsoft (MSFT +0.94%).

Now, over half of this is reportedly from OpenAI. The AI company behind ChatGPT has signed a contract worth more than $300 billion over a five-year period starting in 2027, according to multiple reports, which is by far the largest individual cloud deal ever signed. Other major customers contributing to the backlog include Meta Platforms (META 3.56%), SpaceX (SPCX +1.51%) through its xAI subsidiary, Nvidia (NVDA +0.61%), and other tech heavyweights.

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It's also important to clarify what "AI contracts" include. The primary product is OCI (Oracle Cloud Infrastructure) compute capacity, which essentially refers to rented data center capacity and GPUs. Most contracts are multi-year, and only about 12% of the backlog is expected to convert to revenue over the next year.

The unanswered questions investors need to consider As mentioned, there are two big unanswered questions.

First, can Oracle's customers reasonably fulfill their contracted obligations, especially when it comes to OpenAI? So far, OpenAI hasn't had much trouble raising capital, but it is still a private, cash-burning company, and the $300 billion or so it has committed to spend with Oracle isn't its only large obligation. The AI company has committed to about $350 billion in spending with Broadcom (AVGO +0.99%), $250 billion with Microsoft (Azure), about $100 billion on Nvidia systems, as well as deals with AMD (AMD 0.12%), Amazon (AMZN +0.78%), and others. In all, OpenAI is estimated to have committed well over $1 trillion in hardware and cloud infrastructure spending.

With spending commitments like that, it's not surprising that the market is a little skeptical. In fact, it was reported last week that OpenAI plans to delay its IPO, and this was a big reason why Oracle's stock has had its worst week in many years.

The second question is how much Oracle will need to erode its financial condition to deliver on these orders. In the current fiscal year, Oracle's estimated $95 billion in capex will require it to raise $40 billion in new capital, pushing its long-term debt above $100 billion. Free cash flow turned negative in the company's most recent fiscal year for the first time in a while, and this is likely to be the case for the foreseeable future. Plus, Oracle's gross margins could come under pressure as infrastructure costs rise, and there's always the longer-term risk of AI disrupting the enterprise software industry.

Is Oracle stock a bargain or a trap? Let's be clear. If Oracle can successfully deliver on its obligations and get a strong ROI on its capex, the company's stock could be an absolute bargain at the current level. And to be fair, the company has a long track record of solid execution.

At its current price, Oracle stock trades for just over 18 times forward earnings estimates. The last time Oracle had a price-to-sales ratio at its current level was in early 2024, largely before the AI infrastructure spending wave began. And this is for a company that not only has a massive backlog but is also growing its actual revenue at 21% year-over-year. It's also worth noting that Oracle's guidance for the current quarter calls for 28% revenue growth (at the midpoint), which would represent a significant acceleration.

In a nutshell, Oracle has some major risk factors, but the price is right, and the risk-reward dynamics look attractive at these levels. In fact, I recently opened a small position in Oracle, and plan to add more if the stock remains at or near these levels.

Latest updates in Oracle Cloud SCM also include new inventory optimization capabilities

, /PRNewswire/ -- Oracle today announced four new Fusion Agentic Applications that will help organizations improve supply chain performance by increasing inventory visibility, reducing supplier and operational impact, and improving manufacturing efficiency. Built into Oracle Fusion Cloud Supply Chain & Manufacturing (SCM), the new agentic applications are powered by coordinated teams of specialized AI agents that are outcome-driven, proactive, reasoning-based, and engineered for enterprise execution. In addition, to help organizations further increase supply chain resilience, Oracle is also introducing new inventory optimization capabilities.

"Supply chain leaders are under increasing pressure to improve service levels, control costs, and respond faster to disruption amid ongoing economic and operational uncertainty," said S.Y. Shenoy, senior vice president, Fusion SCM development, Oracle. "With the new agentic applications and inventory optimization capabilities in Oracle Cloud SCM, organizations can identify issues sooner, prioritize actions, and make faster, more informed decisions across planning, procurement, and manufacturing."

Part of Oracle Fusion Cloud Applications, Oracle Cloud SCM helps organizations enhance resilience and quickly adapt to market changes by providing a unified AI-powered platform that integrates supply chain planning and execution processes. It includes embedded AI agents and agentic applications that help accelerate product design, manufacturing, procurement, order fulfillment, and logistics execution. In addition, customers can take advantage of the AI Agent Studio for Fusion Applications to build, connect, and run AI automation and agentic applications using reusable Oracle, partner, and external agents without traditional application development.

Fusion Agentic Applications for Supply Chain
Running on Oracle Cloud Infrastructure and powered by industry-leading LLMs, the new Fusion Agentic Applications move beyond assistance to execution, helping supply chain leaders improve business outcomes. By operating inside the existing Oracle Fusion Applications security framework, they can autonomously progress routine work within established guardrails and surface exceptions, tradeoffs, and decisions where desired, such as when human judgment can materially change the outcome. There are four new Fusion Agentic Applications now available within Oracle Cloud SCM:

Inventory Planning Command Center: Helps supply chain teams improve inventory availability, increase service levels, and resolve stockouts faster. This shifts inventory management from manual tracking to an automated, business-driven workflow that helps teams reduce disruptions and improve inventory responsiveness. Supplier Qualification Workspace: Helps procurement teams reduce supplier risk, improve compliance processes, and accelerate supplier qualification. This moves supplier qualification from fragmented tracking and manual follow-up to a guided, risk-based process that helps teams improve compliance posture and accelerate supplier onboarding decisions. Production Readiness Workspace: Helps manufacturing teams improve production readiness and reduce setup errors. This shifts production readiness from manual checklists to proactive corrections and prioritized actions that help teams reduce errors and prevent production delays. Kanban Administrative Workspace: Helps manufacturing teams improve Kanban replenishment, reduce shortages and excess inventory, and maintain production flow. This elevates Kanban replenishment from periodic manual review to proactive, exception-based optimization that helps teams enhance production flow. Inventory Optimization for Supply Chain Planning
New inventory optimization capabilities in Oracle Fusion Cloud Supply Chain Planning help organizations improve inventory performance while balancing service levels and inventory costs. The new capabilities include:

Multi-echelon inventory optimization: Helps supply chain teams improve inventory placement and reduce excess inventory across complex supply chain networks by calculating recommended safety stock targets across the network based on demand and lead time variability. Interactive inventory network visualization: Helps planners better understand inventory performance and supply chain dependencies by providing an integrated view of supply chain relationships, inventory levels, and service-level metrics across the network. Inventory Optimization Advisor Agent: Helps planners identify inventory risks and improve service levels by highlighting the factors contributing to service-level shortfalls, analyzing inventory dependencies, and recommending safety stock adjustments. To learn more about Oracle Cloud SCM, visit oracle.com/scm.

About Oracle Fusion Cloud Applications
Oracle Fusion Cloud Applications provide an integrated suite of AI-powered cloud applications that enable organizations to execute faster, make smarter decisions, and lower costs. Oracle Fusion Applications include:

Oracle Fusion Cloud Enterprise Resource Planning (ERP): Provides a comprehensive suite of AI-powered finance and operations applications that help organizations increase productivity, reduce costs, expand insights, improve decision-making, and enhance controls. Oracle Fusion Cloud Human Capital Management (HCM): Provides a unified AI-powered HR platform that connects people, processes, and data to help organizations automate the employee lifecycle, enhance the employee experience, and drive better business outcomes with a human-agent workforce.  Oracle Fusion Cloud Supply Chain & Manufacturing (SCM): Provides a unified AI-powered platform that integrates supply chain and operations processes and helps organizations enhance resilience and quickly adapt to market changes. Oracle Fusion Cloud Customer Experience (CX): Provides a suite of AI-powered applications that help organizations manage marketing, sales, and service processes to win business, build stronger customer relationships, and improve customer experiences. About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.

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Oracle just wrapped up its worst week on Wall Street in 25 years as concerns continue to mount about the software company's debt load and whether its bet-the-house investment on artificial intelligence will pay off.

The stock plummeted 19% this week, dropping at least 2.6% each of the past five days. It's the steepest weekly drop since a 20% plunge in August 2001, during the depths of the dot-com bust.

The past nine months have been brutal for Oracle investors. After the company reached a peak market cap of $900 billion in September, on budding enthusiasm about Oracle's AI customers, the stock has lost about 55% of its value. The crux of the problem is that for Oracle to fulfill its AI infrastructure commitment, primarily to OpenAI, it's having to raise record amounts of debt, creating balance sheet risk while focusing on lower-margin offerings.

Oracle was sitting on about $130 billion in debt at the end of May, with capital expenditures rising 162% to nearly $56 billion in the 2026 fiscal year. It's racing to open data centers alongside cloud giants Amazon, Microsoft and Google, but without being able to sell a full technology stack like its rivals.

Oracle recorded negative free cash flow of almost $24 billion in the latest fiscal year. Earlier this month, Oracle said that, in fiscal 2027, it plans to raise $40 billion through debt and equity financing, including a $20 billion share sale announced earlier, after $43 billion in debt sales and $5 billion from equity issuance last fiscal year.

"We expect financing/leverage and the pace of equity issuance to remain the central investor debate near term, even as demand signals stay strong," Evercore analysts, who recommend buying the stock, wrote in a note on Wednesday note.

Like Evercore, most firms remain bullish on Oracle's prospects despite investors' growing concerns. According to FactSet, 71% of analysts recommend buying the stock, the highest percentage in 15 years.

Oracle didn't respond to a request for comment.

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Oracle is facing multiple market headwinds. In addition to its hefty capital requirements, the company is trading lower from the selloff in software names as investors worry that AI models will replace many of their products' capabilities. The iShares Expanded Tech-Software Sector Exchange-Traded Fund (IGV) is down 16% so far in 2026, while Oracle has fallen 24%.

In its annual report last week, Oracle disclosed that headcount shrank 13% to 141,000 employees in fiscal 2026, with a notable pullback in sales and marketing.

Larry Ellison, Oracle's co-founder, was absent from the earnings call this month, leaving dual CEOs Clay Magouyrk and Mike Sicilia and recently appointed finance chief Hilary Maxson to answer questions.

"Hilary has a tough life," Magouyrk said on the call.

Because of Oracle's retreating stock price, Ellison has been surpassed on the world's list of wealthiest people by Google co-founders Larry Page and Sergey Brin, Amazon founder Jeff Bezos and Michael Dell. Ellison is still worth over $200 billion.

Oracle is pushing forward with its buildout plans, targeting data centers in Michigan, New Mexico and Texas in 2027.

"As we pursue these opportunities, we'll remain focused on disciplined capital allocation, maintaining a strong balance sheet, and preserving our investment-grade credit rating," Maxson said on the earnings call this month.

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Oracle Corp (NYSE:ORCL, XETRA:ORC) has reduced its workforce by about 21,000 employees over the past year, citing the deployment of artificial intelligence technologies across its operations, according to its annual filing.

The software and cloud company employed approximately 141,000 full-time workers as of May 31, 2026, compared with about 162,000 a year earlier, a decline of nearly 13%.

"The adoption and deployment of AI technologies across our operations have resulted, and may continue to result, in reductions to our workforce," Oracle said in the filing.

Oracle reported $1.8 billion in restructuring costs during the fiscal year, including severance payments and other exit expenses, up from $374 million in the prior year.

The company noted that workforce reductions can be disruptive and may lead to lower productivity, shortages of skilled employees in some roles, loss of institutional knowledge, and weaker employee morale and retention.

Oracle had informed employees in March that it planned to eliminate thousands of positions as it faced investor scrutiny over increased borrowing to support its AI infrastructure expansion. In January, the company announced plans to raise $50 billion through debt and equity financing.

Capital expenditures rose 162% in the latest fiscal year to $55.7 billion, while free cash flow was negative $23.7 billion.

Shares of Oracle traded down almost 3% at Tuesday’s opening bell, down about 13% so far this year.