Oracle’s debt reaches $129.5 billion, 4.3 times EBITDA, as $260 billion in data center leases strain its balance sheet.
Oracle Corp’s aggressive AI infrastructure spending has pushed its debt to $129.5 billion, nearly 4.3 times its EBITDA, raising concerns over its financial health. The company’s $260 billion in long-term data center leases, disclosed in June, has alarmed investors and ratings agencies alike.
S&P Global Ratings downgraded Oracle to BBB-, just one notch above junk status, citing its leveraged balance sheet. Competitors like Alphabet, Amazon, and Microsoft maintain debt-EBITDA ratios below 1, highlighting Oracle’s outlier position in the sector.
Shares have declined as investors question the sustainability of Oracle’s debt-fueled expansion amid rising capital expenditures and negative free cash flow.