Oracle’s Shares Plunge 55% as Rising Debt Fuels AI Data Center Expansion
Oracle’s debt is climbing as it expands AI data center capacity to meet surging demand. The stock has declined 55% year-to-date on concerns over rising leverage and capital intensity.
1. Rising Debt to Fund AI Infrastructure
Oracle has increased its borrowing to finance the build-out of new AI data centers, pushing long-term debt levels higher. Management cites strong enterprise demand for AI services as the primary driver behind the accelerated capital spending.
2. 55% Year-to-Date Share Decline
The stock has fallen 55% since the start of the year, reflecting investor concerns over debt-fueled expansion and potential margin pressure. Heavy selling in technology names has exacerbated the slide in Oracle’s share price.
3. Capital Intensity and Profitability Outlook
Higher interest expenses and upfront infrastructure costs may weigh on free cash flow and operating margins in upcoming quarters. Analysts and investors will watch quarterly results for signs of revenue gains offsetting the increased leverage.