“Every morning the opening screen on my Bloomberg is what’s going on with CDS spreads on Oracle debt,” Morgan Stanley Wealth Management CIO Lisa Shalett told Fortune in October, seeming to speak for a market that was increasingly worried about the bursting of a bubble in artificial intelligence. CDS, as students of the 2008 financial crisis know, stands for “credit default swaps,” a financial instrument to hedge against giant debt loads elsewhere in the market. And the reason Shalett highlighted Oracle’s CDS was that the Larry Ellison–founded software giant has stood out as a relative anomaly among the “hyperscaler” companies fueling billions in data center investment for having just too much debt.
“If people start getting worried about Oracle’s ability to pay,” Shalett told Fortune, “that’s gonna be an early indication to us that people are getting nervous.”
That’s why Bank of America Research wrote on Tuesday that “the lack of clarity on hyperscaler borrowing was the key risk going into 2026,” and why a single press release from Oracle on Sunday carried so much weight, not just with Oracle investors but for the entire AI trade.
Announcing its financing plan for 2026, Oracle said it expects to raise $45 billion to $50 billion of gross cash proceeds, and plans to achieve this funding objective by “using a balanced combination of debt and equity financing to maintain a solid investment-grade balance sheet.” The most significant bit, according to BofA Situation Room analysts Yuri Seliger and Sohyun Marie Lee, is that Oracle plans for a single bond deal to cover its debt borrowing needs for the full year, after which it priced $25 billion of bonds on Monday.
