Oracle Corporation (NYSE: ORCL) suffered a 19% weekly decline through June 27, its steepest single-week drop in 25 years, a fall that last occurred during the depths of the dot-com bust in August 2001.
The selloff has rattled Wall Street, with investors growing increasingly uneasy about Oracle’s mounting debt load, its aggressive artificial intelligence infrastructure spending, and whether the long-term payoff justifies the near-term financial strain.
Oracle is not cautiously testing the AI market but is instead committing to it at a scale that few technology companies have attempted, signing long-term contracts with major customers including OpenAI and building out vast data center infrastructure.
The company’s remaining performance obligations, a measure of committed future revenue, finished the most recent quarter at $638 billion, representing a staggering 363% increase year over year.
That backlog reflects enormous demand, but Oracle is spending heavily to fulfill it, with the company sitting on approximately $122 billion in long-term debt as of its most recent reporting period.
To fund its continued expansion, Oracle announced during its earnings call that it plans to raise roughly $40 billion through a combination of debt and equity issuance in fiscal year 2027, including a previously announced $20 billion share sale.
The balance sheet tells the full story of this transformation, with total assets climbing to $261.8 billion as of May 2026, up sharply from $168.4 billion a year earlier, driven almost entirely by net property, plant, and equipment jumping to $129.6 billion from $56.7 billion.
Long-term debt rose to $122.3 billion from $85.3 billion over the same period, pushing total liabilities to $218.7 billion and leaving shareholders’ equity at a comparatively thin $43.1 billion.
Oracle also disclosed in its annual report that it cut its global workforce by 13% to 141,000 employees in fiscal year 2026, with particularly deep reductions in its sales and marketing divisions.
CFO Hilary Maxson moved to reassure investors on the earnings call, stating that the company would “remain focused on disciplined capital allocation, maintaining a strong balance sheet.”
Despite the sharp stock decline, analyst sentiment across Wall Street remains broadly positive, with 28 of the 33 analysts covering the stock recommending “Buy” and the remaining five recommending “Hold.”
The average price target among analysts stands at $264, implying approximately 78% upside from current trading levels, suggesting the professional investment community views the selloff as an overreaction rather than a fundamental deterioration.
Evercore analysts, who maintain a “Buy” rating on the stock, acknowledged that “financing, leverage, and the pace of equity issuance” will likely remain the central debate for investors in the near term, even as underlying demand signals stay strong.
Oracle’s stock now sits roughly 55% below its all-time highs, a decline that reflects both the broader market’s reassessment of AI infrastructure spending and specific concerns about how long it will take Oracle to convert its record backlog into meaningful earnings growth.
Long-term investors who believe in the company’s AI buildout thesis may view the current price as an attractive entry point, while more risk-averse observers may prefer to wait for evidence that the $638 billion backlog is translating into the revenue growth Oracle has projected through fiscal year 2030.
