Oracle Corporation finds itself navigating turbulent financial waters as its aggressive push into artificial intelligence infrastructure collides with investor concerns over mounting costs. The technology giant’s stock has entered a period of unprecedented decline, shedding more than half its value since last autumn’s peak.
A Steep Descent from Record Highs
The opening days of February 2026 have proven particularly punishing for Oracle shareholders. The stock recently concluded its worst eight-day trading stretch in over twenty years, closing at $136.48. This marks a dramatic fall from its all-time high of $326.90, recorded in September 2025.
This erosion of value, exceeding 50%, stems from a confluence of pressures. Market participants are primarily alarmed by the company’s escalating debt levels and the substantial capital expenditures required to build out its AI cloud capacity. Additional uncertainty surrounds the long-term financing capabilities of major clients like OpenAI for their multi-billion dollar commitments. Legal action from bondholders regarding the disclosure of capital needs has further clouded the outlook.
Financing a Multi-Billion Dollar Vision
To meet exploding demand for cloud resources from partners including Nvidia, Meta, and OpenAI, Oracle is undertaking a massive capital raise. On February 1, the company announced plans to secure between $45 and $50 billion in funding during the current calendar year.
The strategy employs a balanced mix of debt and equity. Approximately half of the total is expected to come from issuing new shares and equity-linked instruments, with the remainder raised through bonds. An initial step was completed on February 5 with the placement of preferred stock.
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This approach has received a measured response from credit markets. By avoiding sole reliance on new debt and bolstering its equity base, Oracle saw the cost of its credit default swaps (CDS) decline following the announcement. Rating agency Moody’s subsequently affirmed the company’s Baa2 credit rating.
Record Backlog Contrasts with Market Anxiety
Despite the severe market reaction, fundamental business metrics tell a story of robust demand. Oracle’s remaining performance obligations (RPO)—a measure of contracted future revenue—surged to $523 billion in the second quarter of fiscal 2026. This represents a staggering 438% increase compared to the same period last year.
This colossal backlog underscores the tangible nature of the technological demand Oracle is targeting. The company’s cloud infrastructure revenue recently grew 68% to $4.1 billion. The current challenge, therefore, lies not in securing sales, but in the costly and high-stakes financing of the necessary hardware to fulfill these orders.
All eyes are now on Oracle’s upcoming quarterly report, scheduled for March 9, 2026. Investors will scrutinize the pace at which the enormous backlog converts into profitable revenue and assess whether the aggressive expansion strategy remains financially sustainable.
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