Oracle stock hit a 14-month low on Monday, tumbling 6.5% as debt concerns and reliance on OpenAI weighed on investor sentiment. The selloff extended a brutal run that has seen ORCL shares fall 47% since the start of June, despite the company’s record backlog of signed AI contracts.
The decline came amid a broader market sell-off triggered by escalating U.S.-Iran tensions, but Oracle’s troubles run deeper. The company faces a fundamental tension: it has accumulated a massive $638 billion in remaining performance obligations—up 363% year-over-year—yet is piling on debt at a rapid pace to build the infrastructure needed to fulfill those contracts.
Oracle spent $55.7 billion on capital expenditures in fiscal 2026, overshooting its own $50 billion target, according to Reuters. The company raised $43 billion in debt financing and $5 billion in equity during the fiscal year that ended May 31, 2026. For fiscal 2027, Oracle said it would raise an additional $40 billion in debt and equity to fund expansion.
The core problem is concentration risk. Oracle’s future order book depends heavily on a handful of companies, chiefly OpenAI, which signed a $300 billion, five-year cloud computing contract with Oracle in September 2025. That contract is now viewed by some retail investors as a liability rather than an asset, according to the Yahoo Finance report. OpenAI itself is facing headwinds: the startup has delayed its initial public offering to 2027 and faces competition from Anthropic, which is now valued higher and has a stronger revenue run rate.
Oracle ended fiscal 2026 with net debt of $97.6 billion, a roughly 20% increase from the prior year, according to Seeking Alpha. The company’s free cash flow swung negative to negative $23.7 billion in fiscal 2026, a stark reversal that reflects the massive upfront spending required to build AI data centers. This cash burn, combined with Oracle’s heavy reliance on OpenAI’s continued growth and financial stability, has spooked investors even as the company’s backlog suggests strong future demand.
The stock’s decline reflects investor skepticism about whether Oracle can convert its record backlog into profitable revenue while managing its debt load. Execution risk—the challenge of turning contracts into cash while funding massive infrastructure investments—has become the central question for the company’s investment case.
Sources
- Yahoo Finance — Oracle stock fell 6.5% to a 14-month low, down 47% since June; OpenAI contract repricing; backlog and debt details
- Reuters — Oracle spent $55.7 billion on capital expenditures in fiscal 2026, above its $50 billion target
- Oracle Investor Relations — Fiscal 2026 results: $43 billion debt raised, $5 billion equity raised; fiscal 2027 guidance of $40 billion financing
- Seeking Alpha — Oracle’s net debt of $97.6 billion at end of fiscal 2026, up 20% from prior year
