Oracle faces pressure on its stock and corporate bonds following revelations of a massive increase in spending to build out its AI infrastructure. The company raised its fiscal year capital expenditure forecast by $15 billion, setting the new target at $50 billion.

Lease commitments for data centers and cloud infrastructure surged 148% in just three months, reaching $248 billion.

Oracle intends this aggressive spending to fulfill a huge backlog of AI-related contracts, including a significant deal with OpenAI. While the company’s recent quarterly results showed strong cloud revenue growth of 33%, cloud infrastructure revenue specifically jumped 66%.

Investors are increasingly concerned about the enormous cost, high leverage, and debt required to execute these projects. This anxiety has replaced the market’s initial enthusiasm for Oracle’s AI ambitions.

The shift led to a significant stock plunge and a 16-year high in the company's credit risk, Bloomberg reported. Analysts now view Oracle as a "show me story," waiting to see if the massive investment translates into profitable growth amid execution risks.