Oracle is facing one of its toughest market moments after the company’s massive AI deal with OpenAI collided with rising doubts from Wall Street. The sell‑off began just weeks after the stock jumped 36% in its best trading day since 1992, and the reversal has erased that entire gain. By mid‑November, traders told CNBC the stock was now pacing toward its worst month since 2011. The pressure is tied to OpenAI’s $300 billion, five‑year commitment to Oracle, which investors say may be too large for a company still burning through cash. The questions started building after traders asked whether the wider AI market raced too fast and whether OpenAI could deliver the $60 billion a year in payments that Oracle expects. Jackson Ader at KeyBanc Capital Markets said “AI sentiment is waning,” and added that Oracle is expected to generate the least free cash flow among the large cloud companies buying GPUs. Ader said Oracle may have to use unusual financing tools to fund its expansion, and that view is spreading across the market. Oracle moves to raise $38B as it builds data centers and buys GPUs During earnings week, Cryptopolitan reported that Oracle is working to raise $38 billion in new debt to support its AI spending, and the move would push total debt to $96 billion. That financing is meant to fund the company’s work with partners to develop and lease new data centers in Texas, New Mexico, and Wisconsin, while also covering the cost of buying hundreds of thousands of GPUs from Nvidia and Advanced Micro Devices for AI workloads. The company showcased its cloud design at its October AI World conference, where fans cheered the scalable structure. Investors stayed upbeat then because Oracle still had more than $450 billion in signed contracts that were not yet counted as revenue. But within days, that optimism faded, and the ORCL stock crashed by 7% after traders questioned Oracle’s ability to reach the revenue goals it presented at investor day. The company said it expects cloud infrastructure revenue to reach $166 billion in fiscal 2030, up from $18 billion in fiscal 2026, a target that analysts say is hard to prove without stronger numbers. Oracle will report earnings in mid‑December, and the market is watching for signs that the AI plan is producing real income instead of just building more debt. Analysts said traders want to see the impact of OpenAI’s spending before they continue to accept Oracle’s long‑term targets. Credit stress rises as analysts question Oracle’s dependence on OpenAI Andrew Keches at Barclays said Oracle may end up using vendor financing and off‑balance‑sheet debt to support the business. Keches downgraded Oracle’s debt rating this week and wrote that there is “significant funding needs,” adding that his team does not see a clear path for the company’s credit trend to improve. Some investors point to founder Larry Ellison’s experience. A hedge fund manager who spoke to CNBC said Ellison is “someone you don’t want to bet against.” Rishi Jaluria at RBC Capital Markets said Oracle could regain speed with more AI deals, but at the moment, he has a hold rating. Credit analysts told CNBC that Oracle’s 5‑year credit default swaps have reached a two‑year high. Barclays advised clients to buy the swaps. During an interview last month, Clay Magouyrk, one of Oracle’s two CEOs, was asked whether OpenAI will be able to pay Oracle $60 billion a year. Clay responded, “of course,” while also pointing to OpenAI’s growth prospects and rapid rise in users. OpenAI CEO Sam Altman had earlier said that the company will top $20 billion in annualized revenue this year and reach hundreds of billions of dollars by 2030. If you're reading this, you’re already ahead. Stay there with our newsletter .
