Oracle’s Rollercoaster: Navigating AI Expansion and Credit Risks
Oracle is making waves in credit markets as its default risk spikes dramatically. Here’s what you need to know:
- CDS Surge: Oracle’s five-year credit-default swaps (CDS) have risen to nearly 80 basis points, signaling increased investor apprehension.
- Debt Expansion: With a planned $38 billion bond offering, Oracle aims to supercharge its AI and cloud data center growth, positioning itself against giants like Microsoft and Amazon.
- Rising Risks: Analysts predict Oracle’s net adjusted debt could soar from $100 billion to $290 billion by 2028, creating significant pressure on its balance sheet.
Despite these risks, Oracle’s core database business remains solid, and it boasts an investment-grade rating. The market is closely watching whether its ambitious AI investments will translate into future profits.
Will Oracle’s bold strategy pay off, or will it become a burden? Let’s discuss!
👉 Share your thoughts below! How do you see Oracle navigating this landscape?
