Oracle shares heading for worst quarter since 2001 following AI investment concerns

Larry Ellison’s Oracle is stumbling into the end of the year with its shares taking a beating.The tech firm’s stock has plummeted 30% so far this quarter, CNBC noted Friday.Only four trading days remain — and the stock is staring down its steepest drop since the 2001 aftermath of the dot-com meltdown.Wall Street is losing faith in Oracle’s capacity to crank out new server farms for OpenAI, even after the artificial intelligence giant agreed to spend over $300 billion with the tech firm.Earlier this month, Oracle reported weaker-than-expected quarterly revenue and free cash flow, and on the earnings call, newly appointed finance boss Doug Kehring called for $50 billion in fiscal 2026 capital expenditures — 43% higher than the plan in September and double the total from a year earlier.Additionally, Oracle is plotting $248 billion in leases to boost cloud capacity, on top of building data centers, CNBC reported.That kind of growth won’t come cheap — it’ll take boatloads of debt.

Oracle piled on $18B in a jumbo bond sale in September, one of the biggest ever in the tech industry.Top brass vowed to protect the company’s investment-grade rating, but wary investors aren’t buying it, driving up the cost of insuring Oracle’s debt.“Considering Oracle is already barely hanging on to an investment grade rating, we would be concerned about Oracle’s ability to live up to these obligations without restructuring its OpenAI contract,” analysts at D.A.

Davidson wrote in a note to clients on Dec.12.

They have the equivalent of a hold rating on the stock.Oracle did not comment.This comes just months after Oracle named Clay Magouyrk and Mike Sicilia as its new CEOs, replacing Safra Catz, who was instrumental in shaping the company’s cloud strategy and thrusting it to the forefront of the ongoing AI boom with big contract wins.Just two weeks before the transition, Oracle reported about a jaw-dropping 359% surge in revenue backlog tied heavily to Ope...