In recent weeks, Oracle’s investment‐grade bonds have underperformed, with five‐year credit spreads widening to levels not seen since the global financial crisis. Investors are demanding an extra 120 basis points over Treasuries to hold Oracle debt, up from 80 basis points six months ago. The sell‐off reflects market unease about the company’s rapid build‐out of AI infrastructure and the potential impact on its balance sheet. As Oracle pursues large‐scale data center expansions in support of its OpenAI partnership, analysts warn that elevated leverage ratios—projected to peak above 2.5x net debt to EBITDA in fiscal 2026—could constrain financial flexibility and weigh on credit ratings unless free cash flow rebounds sharply.

Oracle reported that its Remaining Performance Obligations (RPO) balance reached $523 billion at the end of its latest quarter, more than quadrupling year‐over‐year. This backlog, which covers unrecognized software and cloud services revenue, underpins management’s guidance for high-teens percent revenue growth through fiscal 2027. Cloud subscription RPO accounted for approximately 65 percent of the total, reflecting strong uptake of Oracle’s autonomous database and infrastructure offerings. With over 70 percent of this backlog expected to convert into recognized revenue within the next 12 months, investors gain clear visibility into the company’s growth trajectory despite near-term margin pressures from AI‐related investments.

On January 15, 2026, the Portnoy Law Firm announced an investigation into Oracle for potential securities fraud, focusing on disclosures around its $300 billion, five-year cloud computing agreement with OpenAI and subsequent debt issuance plans. The firm alleges that Oracle failed to fully inform shareholders of the funding risks associated with its $38 billion proposed debt sale, intended to finance new data centers. Questions also surround a December earnings call in which management disclosed an unexpected $15 billion CapEx increase for fiscal 2026. The inquiry could lead to a class‐action suit if regulators find that Oracle’s statements omitted material information, potentially exposing the company to sizable legal and financial liabilities.