Oracle Stock Extends Its Slide After Worst Week Since the 2001 Dot-Com Bust Amid AI Debt Worries Today

Oracle shares fell again Monday morning, extending a punishing stretch that has wiped out a significant portion of the software giant's market value as investors continue to weigh whether the company's enormous borrowing to fund its artificial intelligence buildout will ultimately pay off.

Shares of the Austin, Texas-based company were trading at $145.89 as of 10:14 a.m. EDT, down $2.64, or 1.78%, on the day. The decline comes on the heels of what has already been described as Oracle's worst week on Wall Street in roughly 25 years. The stock fell 19% over the five trading sessions last week, dropping at least 2.6% on each individual day, marking its steepest weekly decline since a 20% plunge in August 2001, during the depths of the dot-com bust.

The selloff traces back to Oracle's fiscal fourth-quarter earnings report, released June 10. On the surface, the results were strong: Oracle beat Wall Street expectations on both earnings and revenue, posting adjusted earnings per share of $2.03 against analyst estimates of $1.96, while revenue climbed 21% year-over-year to $19.18 billion, also ahead of the $19.10 billion analysts had projected. Cloud revenue, the segment most closely tied to Oracle's artificial intelligence ambitions, surged 47% to nearly $10 billion for the quarter. Despite those headline beats, shares dropped roughly 10% in extended trading that evening after the company disclosed plans to raise an additional $20 billion through debt and equity financing on top of amounts already announced, bringing its total planned fiscal 2027 financing to around $40 billion. That follows a fiscal 2026 in which Oracle had already raised $43 billion in debt and $5 billion in equity to fund its rapidly expanding data center footprint.

The scale of that spending has unsettled investors in the weeks since. Oracle's capital expenditures jumped 162% in fiscal 2026 to nearly $56 billion, while the company posted negative free cash flow of almost $24 billion for the year. By the end of May, Oracle's total debt stood at roughly $130 billion, and the company has indicated that net cash outlays for capital expenditures in fiscal 2027 could reach approximately $70 billion, not including $20 billion to $25 billion in prepayments expected from customers. Oracle is racing to bring data center capacity online alongside cloud rivals Amazon, Microsoft and Google, despite lacking the ability to sell as complete a technology stack as some of those larger competitors.

Much of Oracle's long-term bull case rests on its enormous backlog of contracted future business, known as remaining performance obligations, which stood at roughly $638 billion as of the most recent quarter. Bank of America analysts, who recommend buying Oracle shares, have noted that more than half of that backlog comes from a single customer: OpenAI. That concentration has become a growing point of concern among some investors, particularly amid separate reports that OpenAI could push back its long-awaited initial public offering to 2027, a development that rattled sentiment across AI-linked software and infrastructure stocks more broadly. At one point during the recent selloff, Oracle's total market capitalization actually fell below the size of its own RPO backlog, an unusual dynamic that underscored just how skeptical some investors have become about translating that contracted demand into near-term profit.

Adding to the unease, Oracle disclosed in its annual report last week that its workforce shrank 13%, a reduction of roughly 21,000 employees, to about 141,000 workers in fiscal 2026, with the company recording $1.84 billion in associated restructuring costs. The cuts have been tied in part to a broader push to integrate artificial intelligence tools into roles previously handled by sales, marketing and other staff. Vice Chairman Jeffrey Henley also drew attention after disclosing a $63.7 million sale of company shares on June 24, adding to investor unease about insider activity even as the company pursues additional equity issuance that could further dilute existing shareholders.

Leadership changes have also factored into the narrative. Oracle co-founder and chairman Larry Ellison was notably absent from the company's most recent earnings call, leaving dual chief executives Clay Magouyrk and Mike Sicilia, along with recently hired finance chief Hilary Maxson, formerly of Schneider Electric, to field analyst questions. Magouyrk struck a lighter note about Maxson's new role during the call.

"Hilary has a tough life," Magouyrk said.

The stock's decline has had a notable knock-on effect for Ellison personally; as Oracle shares have retreated, the co-founder has slipped on rankings of the world's wealthiest people, falling behind Google co-founders Larry Page and Sergey Brin, Amazon founder Jeff Bezos and Dell Technologies founder Michael Dell.

Wall Street's reaction to the turmoil has been mixed. Citic Securities downgraded Oracle to "Add" from "Buy" with a $200 price target as the selloff deepened, while RBC raised its own price target to $190 but maintained a cautious "Sector Perform" rating, citing uncertainty over whether Oracle's data center capacity is coming online quickly enough to match its massive backlog. BNP Paribas has flagged that fiscal 2027 capital expenditures could climb as high as $80 billion to $100 billion under the company's Stargate data center initiative, a figure that has stoked further concern about free cash flow and debt sustainability. Evercore, which maintains a buy rating on the stock, struck a more measured tone in a note to clients last week.

"We expect financing and the pace of equity issuance to remain the central investor debate near term," Evercore analysts wrote.

Not every recent headline has been negative. Real estate developer Related Digital and investment firm Blackstone announced they had secured funding for a $16 billion Oracle data center site in Michigan, a sign that institutional capital remains willing to back the company's infrastructure ambitions even amid the broader stock turmoil. Jefferies has also maintained a Buy rating on the shares in recent days, reflecting a continued, if narrower, base of Wall Street support.

Oracle stock has now fallen roughly 23% over the past year, well off its 52-week high of $345.72 and trading closer to its 52-week low of $134.57. Whether the company's massive, debt-fueled bet on artificial intelligence infrastructure ultimately justifies the scale of its spending is likely to remain the central question hanging over the stock in the months ahead, particularly as investors watch closely for any signs of strain tied to its heavy reliance on a small number of large AI customers.