economy
Oracle hit hard in Wall Street’s tech sell-off over its huge AI bet
Company falls more than rivals over its borrowing and reliance on OpenAI contracts.
TL;DR
- Oracle's stock has fallen 25% in the past month, significantly underperforming Big Tech rivals.
- The company is committing hundreds of billions to AI infrastructure, largely for OpenAI.
- Concerns exist about the capital-intensive nature of these deals and Oracle's increased reliance on OpenAI.
- Oracle's debt has surged, with projections showing it could reach $290 billion by 2028.
- Analysts cite risks in Oracle's strategy, including long-term data center leases exceeding contract terms and a high debt-to-equity ratio.
- Oracle is the only hyperscaler with negative free cash flow.