Oracle Shares Suffer Worst Weekly Decline in 25 Years as AI Investment Strategy Sparks Investor Concerns

Oracle has recorded its steepest weekly stock market decline in a quarter of a century, with shares plunging 19% amid growing investor concerns over the company’s rising debt and the financial risks tied to its aggressive artificial intelligence expansion.

The sharp sell-off marks Oracle’s worst performance since August 2001, when the company lost 20% of its market value during the collapse of the dot-com bubble. Over the past five trading sessions, the software giant’s stock fell every day, highlighting increasing market unease about its long-term financial strategy.

The latest downturn adds to what has been a difficult period for Oracle investors. After reaching a market valuation of approximately $900 billion in September last year on optimism surrounding its AI business, the company’s shares have since lost nearly 55% of their value.

At the center of investor concerns is Oracle’s decision to significantly increase borrowing in order to fund its expanding AI infrastructure. Much of the investment is linked to supporting large-scale artificial intelligence projects, including partnerships with OpenAI, as the company races to strengthen its position in the fast-growing cloud computing and AI sectors.

As of the end of May, Oracle’s total debt had climbed to roughly $130 billion, while capital expenditure for the 2026 fiscal year surged by 162% to nearly $56 billion. The company is investing heavily in new data centers as it competes with major cloud providers such as Amazon, Microsoft, and Google.

Unlike many of its larger rivals, however, Oracle does not offer a fully integrated technology ecosystem, leading some analysts to question whether its substantial investments will generate returns quickly enough to justify the mounting financial commitments.

Financial performance has also fueled investor caution. Oracle reported negative free cash flow of almost $24 billion in its most recent fiscal year, underscoring the significant cash demands of its expansion strategy.

Looking ahead, the company has announced plans to raise an additional $40 billion through a combination of debt and equity financing during the 2027 fiscal year. The fundraising plan includes a previously announced $20 billion stock offering. In the previous fiscal year alone, Oracle secured $43 billion through debt issuance and another $5 billion from equity offerings.

Market analysts remain divided over the company’s outlook. In a recent research note, analysts at Evercore said investor discussions are likely to remain focused on Oracle’s growing leverage and financing strategy despite continued strong demand for its AI services. Nevertheless, the firm maintained its “buy” rating on the stock.

Despite the recent sell-off, confidence among Wall Street analysts remains relatively strong. According to FactSet data, about 71% of analysts currently recommend buying Oracle shares—the highest level of bullish sentiment for the company in the past 15 years.

While Oracle’s ambitious push into artificial intelligence presents significant growth opportunities, investors are closely watching whether the company’s heavy spending and rising debt can ultimately translate into sustainable profits. The coming quarters are expected to be crucial in determining whether Oracle’s AI strategy delivers the long-term returns the company is betting on.