Oracle stock continues its steep decline as investors assess the financial implications of its massive cloud and AI ambitions. The primary concern driving the selloff is the company's aggressive capital expenditure forecast. Oracle announced it increased its fiscal 2026 CapEx forecast by $15 billion, bringing the total to approximately $50 billion.
The market is focusing on the immense capital required to fulfill these commitments. Following the fiscal second-quarter report, Oracle revealed a substantial increase in its backlog to $523 billion. This figure includes the reported $300 billion contract with OpenAI.
This aggressive spending, combined with Oracle’s already significant debt, has spooked the market. The stock has faced a sharp drop, and the company’s credit risk has risen. These movements reflect fears about execution risk and the long-term profitability of the large-scale datacenter buildout.
Despite the negative reaction, Oracle insists its projects, including the OpenAI data centers, remain on schedule and denies any delays. While the company’s cloud infrastructure revenue shows robust growth, investors remain cautious about the leveraged balance sheet and the timeline for realizing returns on the massive AI-related investments.