Oracle shares fell 19% this week — the steepest weekly decline since the dot-com bust in August 2001 — as investors raised alarms over the company's $130 billion debt load and its aggressive AI infrastructure buildout.
Oracle closed out its worst week on Wall Street in 25 years on Friday, with shares tumbling 19% over five consecutive sessions as investors grew increasingly uneasy about the software company's ballooning debt and its all-in wager on artificial intelligence infrastructure.
The weekly decline is the steepest since a 20% plunge in August 2001, at the depths of the dot-com bust — a comparison that has unsettled analysts and shareholders alike.
The selloff reflects a broader reckoning with Oracle's financial position. The company was carrying roughly $130 billion in debt at the end of May, while capital expenditures surged 162% to nearly $56 billion in its 2026 fiscal year. Oracle recorded negative free cash flow of almost $24 billion over that same period.
At its core, the concern is structural: Oracle is racing to build out data center capacity — primarily to serve OpenAI — putting it in direct competition with cloud giants Amazon, Microsoft, and Google. Unlike those rivals, Oracle cannot sell a full technology stack, leaving it exposed to lower-margin offerings while shouldering record financing costs.
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 share sale. That follows $43 billion in debt sales and $5 billion from equity issuance during the 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 wrote in a note on Wednesday. Evercore maintains a buy rating on the stock.
Despite the selloff, Wall Street's broader analyst community has not abandoned Oracle. According to FactSet, 71% of analysts recommend buying the stock — the highest share in 15 years. Most firms remain bullish on the company's long-term AI infrastructure prospects even as near-term balance sheet risk weighs on sentiment.
Oracle's stock decline has also taken a personal toll on co-founder Larry Ellison. The retreating share price has pushed him behind Google co-founders Larry Page and Sergey Brin, Amazon founder Jeff Bezos, and Michael Dell on the list of the world's wealthiest individuals, though Ellison remains worth more than $200 billion.
The company disclosed additional strain in its annual report last week, revealing that headcount fell 13% to 141,000 employees in fiscal 2026, with a pronounced reduction in sales and marketing staff.
On the most recent earnings call, dual CEOs Clay Magouyrk and Mike Sicilia and newly appointed finance chief Hilary Maxson fielded investor questions. Ellison was notably absent. "Hilary has a tough life," Magouyrk said on the call, a remark that drew attention given the scope of Oracle's financing challenges.
The company is also contending with a sector-wide pressure on software names. Investors increasingly worry that advances in AI models will erode the value of legacy software products, a concern reflected in the iShares Expanded Tech-Software Sector ETF, which is down 16% so far in 2026. Oracle has fallen 24% over the same period, underperforming even that benchmark.
Oracle's peak market capitalization reached $900 billion in September, buoyed by early enthusiasm over its AI customer base. Since then, the stock has shed approximately 55% of its value.
The company is pressing ahead with data center construction plans targeting sites 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.
Whether Oracle can sustain that credit rating while continuing to absorb tens of billions in annual capital expenditures will likely define investor sentiment in the months ahead.
TechEchelon Staff bylines are produced collectively by the newsroom for short, breaking, and wire-style coverage. Longer-form reporting is published under the responsible reporter's name.
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