Oracle’s market capitalization has dropped from a near–$1 trillion peak in September to under $470 billion, erasing more than $460 billion in value in just five months. The company’s share price has fallen by over 50% since last year’s high, marking the steepest decline for a leading software firm since the 2008 financial crisis. Investors have grown skeptical of Oracle’s positioning in the fast-evolving AI landscape, questioning whether its data-center investments can generate the returns previously promised.

Oracle has ramped its fiscal 2026 capital expenditure guidance to $50 billion—up from $35 billion just three months earlier—spending $12 billion in the second quarter alone. Analysts estimate total CapEx could exceed $60 billion by fiscal 2028. To fund this build-out, the company has taken on roughly $108 billion in total debt and $24 billion in lease liabilities, while raising $38 billion through term loans for new data centers in Wisconsin and Texas, and another $18 billion via investment-grade bonds for facilities in New Mexico.

Oracle’s future lease commitments surged by $148 billion in the third quarter, bringing total contractual lease obligations to $248 billion, with terms extending up to 19 years. When combined with its on-balance-sheet debt and lease liabilities, the company’s total financial obligations approach $380 billion. Although Oracle boasts Remaining Performance Obligations of $523 billion, over half of this backlog stems from its multi-year contract to supply computing power to OpenAI, raising questions about concentration risk and revenue realization.

In January, bondholders filed a class-action lawsuit accusing Oracle of misleading investors in an $18 billion debt sale, alleging that the company omitted disclosure of subsequent loan requests for AI data centers. This litigation, coupled with growing unease over ‘circular deals’ between Oracle and unprofitable AI startups, has dampened investor appetite. HSBC analysts warn that the AI partner’s own projected funding shortfalls could exacerbate Oracle’s cash-flow risks, leading many to conclude that the stock remains overvalued until substantial revenue from these AI agreements materializes.