Oracle Corp. (Oracle (ORCL)) is having a rough Monday. The stock is down 3.17% to $122.40, hovering just above its 52-week low of $121.50. For context, the Nasdaq is up 1.15% and the S&P 500 has gained 0.43%, so this is very much an Oracle-specific story.
The sell-off comes as traders digest a cocktail of worries: rising debt, massive AI infrastructure spending, and credit risks tied to OpenAI. On a recent episode of the Prof G Markets podcast, co-host Ed Elson modeled a worst-case scenario where OpenAI could face annual losses of $165 billion by 2030 under certain revenue and pricing declines. That's a staggering number, and it matters because Oracle is deeply intertwined with OpenAI's infrastructure needs.
Host Scott Galloway noted that S&P recently downgraded Oracle's debt, explicitly citing OpenAI as a key credit risk for the hardware and software company. So when OpenAI's financial health comes into question, Oracle feels the heat.
Infrastructure Capex Triggers Free Cash Flow Deficit
Oracle's own spending habits aren't helping. The company's capital expenditure binge has pushed free cash flow to a negative $23.7 billion. Quarterly capex hit $16.49 billion, and full-year capital expenditures surged 162% to $55.7 billion. That's a lot of money going out the door for AI data centers and related infrastructure.
And it might not stop there. BNP Paribas analyst Stefan Slowinski previously noted that fiscal 2027 capital spending could reach between $80 billion and $100 billion as Oracle accelerates non-Abilene Stargate campuses under new CFO Hilary Maxson. The market is clearly worried about how all this spending will be funded and whether it will pay off.
Record Revenue Backlog Fails to Halt Sell-Off
It's not all bad news. Oracle's Remaining Performance Obligations (RPO) jumped by $85 billion in the fourth quarter to a record $638 billion. That's a massive backlog of future revenue. Full-year revenue also climbed to $67 billion. But the market is looking past the backlog and focusing on the here and now—specifically, how Oracle plans to finance its ambitions.
The company indicated in its guidance that it expects to raise more than $40 billion through a combination of debt and equity this year. That projected fundraising has already pushed up borrowing costs: the yield on Oracle's 2052 bonds is now 7.6%, and its 2050 bonds yield 7.34%. When a blue-chip company has to pay that much to borrow, it signals stress.
Technical Analysis
On the charts, Oracle is in a pronounced downtrend. The stock is down 49.84% over the past 12 months and is sitting right on its 52-week low zone at $121.50. It's trading 14.2% below its 20-day simple moving average (SMA), 31% below its 50-day SMA, and 35.9% below its 200-day SMA. That's classic "below all key averages" behavior—not a pretty picture.
The moving-average structure remains bearish: the 20-day SMA is below the 50-day SMA, and the death cross (50-day SMA below the 200-day SMA) has been in place since January. The Relative Strength Index (RSI) is at 26.55, which is oversold territory. Readings below 30 often signal downside exhaustion risk, but they don't guarantee a reversal without follow-through buying.
- Key Resistance: $142.56
- Key Support: $121.50
So Oracle is at a critical juncture. If it breaks below $121.50, the next support levels could be a lot lower. But if it holds and buyers step in, the oversold RSI could set the stage for a bounce. For now, the market is voting with its feet—and it's voting no.
