Oracle Stock Price 50% Down From Highs, Continues Lower On Fundraising Plan

Oracle's stock (NYSE:ORCL) is continuing the rather dramatic fall from grace in pre-market, with shares dropping 3.94% to $158.11 as markets digested the enterprise software giant's ambitious plans to raise up to $50 billion for cloud infrastructure expansion. The stock now sits more than 50% below its September 2025 peak of $345.72, with year-to-date losses extending to 15.91% through just the first month of 2026.

The sharp decline reflects mounting market skepticism over Oracle's aggressive bet on artificial intelligence infrastructure, a strategy that has seen the company's debt balloon while questions swirl about the financial viability of its mega-contracts with tech titans including OpenAI, Meta, NVIDIA, and xAI. What was once viewed as visionary positioning in the AI gold rush has increasingly been met with concern over execution risk and balance sheet sustainability.

Oracle announced its full calendar year 2026 financing plan to fund the expansion of its Oracle Cloud Infrastructure business, targeting between $45 billion and $50 billion in gross cash proceeds. The company intends to deploy a balanced combination of debt and equity financing to maintain what it describes as a solid investment-grade balance sheet, though markets appear unconvinced by this reassurance given the scale of capital required.

The funding announcement comes as Oracle's debt profile has deteriorated sharply. Total debt has surged from approximately $60 billion in 2020 to over $100 billion by late 2025, with an additional $38 billion earmarked for infrastructure development. Credit default swaps on Oracle's debt recently touched their highest levels since 2009, a telling indicator of market anxiety about the company's financial health and its ability to service what has become a substantial leverage burden.

Oracle's fiscal second-quarter 2026 results did little to assuage concerns. While cloud sales reached $7.98 billion, representing a robust 34% year-over-year increase, the figure fell short of analyst expectations. More troubling was the company's decision to raise full-year capital expenditure guidance to $50 billion from $35 billion, contributing to a negative free cash flow of $10 billion for the quarter. These metrics have intensified doubts about Oracle's ability to quickly monetize its substantial AI and cloud investments.

Price Targets

The combination of aggressive capital deployment, rising leverage, legal uncertainty, and revenue growth that has failed to meet elevated expectations has created huge headwinds for Oracle's stock price. Markets are now questioning whether the company's AI infrastructure investments will generate returns sufficient to justify the financial risks undertaken, particularly as competition intensifies in the cloud computing space and economic headwinds threaten enterprise IT spending.