Oracle stock ends worst week since 2001 as investors dwell on finances

Seer It capped the worst week on Wall Street in 25 years as concerns about the software company’s debt burden and whether its bet on artificial intelligence will pay off continue to mount.

The stock is down 19% this week and is down at least 2.6% in the past five days. That’s the steepest weekly decline since the 20% drop in August 2001, at the depths of the dot-com crash.

The past nine months have been brutal for Oracle investors. After hitting a $900 billion peak in September, the company has lost nearly 55% of its stock value amid excitement from Oracle’s AI customers. The crux of the problem is that Oracle has had to raise record amounts of debt to meet its AI infrastructure commitments, particularly OpenAI, creating balance sheet risk as it focuses on low-margin offerings.

Oracle had about $130 billion in debt at the end of May, and capital expenditures have risen 162% to about $56 billion in fiscal 2026. Racing with cloud giants to open data centers Amazon, Microsoft And Googlebut before it can sell a full technology stack like its competitors.

Oracle recorded almost $24 billion in negative free cash flow in the last fiscal year. Earlier this month, Oracle said it plans to raise $40 billion through debt and equity financing in fiscal 2027, including a previously announced $20 billion stock sale after selling $43 billion in debt and issuing $5 billion in equity last fiscal year.

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

Like Evercore, most firms remain optimistic about Oracle’s prospects despite growing concerns from investors. According to FactSet, 71% of analysts recommend buying the stock; This rate is the highest rate in the last 15 years.

Oracle did not respond to a request for comment.

Oracle is facing many negativities in the market. In addition to higher capital requirements, the company is trading lower due to a sell-off in its software names as investors worry that artificial intelligence models will replace the capabilities of many products. iShares Extended Technology-Software Sector Exchange Traded Fund (IGV) is down 16% so far in 2026, while Oracle is down 24%.

In its annual report last week, Oracle announced that headcount was down 13% to 141,000 employees in fiscal 2026, with a significant decline in sales and marketing.

Oracle co-founder Larry Ellison was absent from this month’s earnings call, 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 in the interview.

Ellison fell behind in world stock markets due to Oracle’s declining stock prices list List of the richest people prepared 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 advancing plans to target data centers in Michigan, New Mexico and Texas in 2027.

“As we pursue these opportunities, we will continue to focus on disciplined capital allocation, maintaining a strong balance sheet and maintaining our investment grade credit rating,” Maxson said in this month’s earnings release.

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