Oracle CEO Clay Magouik (right) speaks during a media tour of the Stargate data center in Abilene, Texas, on September 23, 2025.
Kyle Grillot | Bloomberg | Getty Images
oracle Wall Street just finished its worst week in 25 years, amid growing concerns about software companies’ debt burdens and whether investments like bets on artificial intelligence will pay off.
The stock has plunged 19% this week and has fallen at least 2.6% in each of the past five days. This is the biggest weekly decline since a 20% plunge in August 2001 at the depths of the dot-com recession.
The past nine months have been tough for Oracle investors. As enthusiasm for Oracle’s AI customers grew, the company peaked at a market cap of $900 billion in September, but the stock has lost about 55% of its value. The crux of the problem is that Oracle has had to take on record amounts of debt to meet its AI infrastructure commitments, primarily OpenAI, putting its balance sheet at risk while focusing on lower-margin products.
Oracle had about $130 billion in debt at the end of May, and its capital expenditures are expected to rise 162% to nearly $56 billion in fiscal 2026. Competing with cloud giants to open data centers Amazon, microsoft and googleBut it can’t sell a complete technology stack like its rivals.
Oracle had negative free cash flow of approximately $24 billion in its most recent fiscal year. Earlier this month, Oracle announced that it plans to raise $40 billion in debt and equity financing in fiscal 2027, after spending $43 billion in debt sales and $5 billion in equity issues in the previous fiscal year. This includes the previously announced $20 billion stock sale.
“Even though demand signals remain strong, we expect financing/leverage and the pace of equity issuance to remain central discussions for investors in the short term,” Evercore analysts, who recommend buying the company’s stock, said in a note Wednesday.
Like Evercore, most companies remain bullish on Oracle’s prospects despite growing investor concerns. According to FactSet, 71% of analysts recommend buying the stock, the highest percentage in 15 years.
Oracle did not respond to requests for comment.
Oracle faces multiple headwinds in the market. In addition to high capital requirements, the company has seen its software name plummet and its stock price fall as investors worry that AI models will replace much of the functionality in its products. of iShares expands technology and software sector exchange-traded fund (IGV) is down 16% year to date in 2026, and Oracle is down 24%.
Oracle revealed in its annual report last week that its workforce was down 13% to 141,000 in fiscal 2026 due to significant sales and marketing setbacks.
Oracle co-founder Larry Ellison was absent from this month’s earnings call, leaving the company’s co-CEOs Clay Maguik and Mike Sicilia and recently appointed finance chief Hilary Maxon to answer questions.
“Hillary has had a tough life,” Magouik said by phone.
As a result of Oracle’s stock price drop, Ellison has been overtaken as the world’s richest person by Google co-founders Larry Page and Sergey Brin, and Amazon founders Jeff Bezos and Michael Dell. Mr. Ellison is still worth more than $200 billion.
Oracle is planning to expand its data centers in Michigan, New Mexico, and Texas by 2027.
“As we pursue these opportunities, we remain focused on disciplined capital allocation, maintaining a strong balance sheet and maintaining our investment-grade credit rating,” Maxon said on an earnings call this month.
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