Technology stocks, notably Nvidia and Broadcom, have seen declines, affecting the S&P 500 and semiconductor indexes. Oracle’s co-CEOs, Clay Magouyrk and Mike Sicilia, are facing challenges as the company’s shares dropped 30% this quarter, marking its worst performance since the 2001 dot-com crash. Investor anxiety is mounting due to Oracle’s costly pivot towards artificial intelligence, necessitating significant debt and capital expenditures to support its partnership with OpenAI. Despite securing a $300 billion deal with OpenAI, concerns over fulfilling this commitment are growing, especially if OpenAI fails to generate sufficient revenue amid rising competition. Analysts warn that Oracle may need an additional $100 billion in debt over four years, with projected capital expenditures reaching $50 billion for fiscal 2026. Oracle’s aggressive plan involves substantial investments in cloud capacity, funded by heavy borrowing, leading to fears about its investment-grade credit rating amidst a rising debt load, now at $108 billion.
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