The stock is down 54% from its 2026 high on June 1 and 65% from its peak last September, making its valuation increasingly attractive. However, the pace at which the company has been piling on debt to fund new AI capacity \u2013 much of it tied to recently won business from OpenAI, whose competitive positioning and delayed IPO have come under scrutiny \u2013 has sharply increased Oracle\u2019s risk profile.<\/p>\n
In that sense, Oracle\u2019s future depends not only on its ability to execute \u2013 such as bringing additional cloud capacity online in a timely manner \u2013 but also on factors beyond its control. The second-quarter tech earnings, which are underway, would also have an impact on sentiment around AI and cloud, and potentially on Oracle\u2019s stock as well.<\/p>\n
Investors, Analysts React To Oracle\u2019s Position<\/p>\n
In fact, Oracle\u2019s stock has slid for three sessions straight, losing about 10%, even after the company reported a major $7 billion software contract win from the U.S. Department of Defense last Thursday.<\/p>\n
S&P Global Ratings downgraded Oracle to BBB- on July 9, just a notch above junk, citing its rapidly growing AI-related spending. Oracle’s five-year credit default swaps (CDS) have more than quadrupled since mid-2025 to a record about 203 basis points, meaning more investors expect Oracle to default on its loan,\u00a0according<\/a> to The Kobeissi Letter.<\/p>\n Meanwhile, the Nvidia-OpenAI report drew a response from ace investor and Nvidia short Michael Burry. \u201cAround and around we go. Nvidia to guarantee $200 billion of ChatGPT\u2019s spending on $NVDA chips,\u201d Burry wrote in an\u00a0X post<\/a>, referring to concerns of AI and cloud companies inking\u00a0circular financing deals<\/a> which some say significantly increase risks in the AI ecosystem.<\/p>\n Retail View On ORCL<\/p>\n On Stocktwits, retail sentiment for ORCL was \u2018bullish,\u2019 unchanged from the previous day.<\/p>\n \u201c$ORCL I am dreaming\u2014If Jensen Huang or Elon Musk announce they would fully support Oracle\u2019s data center expansion and provide financing guarantees, the stock could be back to $200 within three trading days,\u201d a trader\u00a0said<\/a>, forecasting the stock nearly doubling.<\/p>\n Another\u00a0wrote<\/a>: \u201c$ORCL one thing the market seems to agree on: if OpenAI wins, Oracle wins.\u201d<\/p>\n For updates and corrections, email newsroom[at]stocktwits[dot]com.<\/p>\n
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