ORCL shares retreat as capital expenditures hit $55.7 billion, raising concerns over debt and AI investment returns.
Oracle’s stock has fallen more than 60% from its highs, pressured by rising capital expenditures and debt levels tied to AI infrastructure investments. The company spent $55.7 billion in capex for the fiscal year ending May 31, more than double the $21.2 billion spent a year earlier, while long-term liabilities rose to $176.9 billion from $114.7 billion.
Despite strong top- and bottom-line growth in its latest earnings, investors remain cautious about the returns on Oracle’s aggressive AI spending. The company plans to raise $40 billion this fiscal year to fund cloud infrastructure, relying on debt and equity. Dependence on OpenAI, which faces profitability challenges, adds further uncertainty.
Shares have underperformed amid broader tech sector volatility, reflecting skepticism over whether Oracle’s AI bets will justify its elevated spending and debt load.