Oracle is learning a painful lesson about the gap between AI ambition and investor patience. The company’s stock has cratered more than 25% year-to-date and roughly 55% from its September 2025 peak, as Wall Street grows increasingly nervous about the sheer volume of cash being funneled into AI infrastructure with uncertain near-term returns.
The numbers tell a stark story. Oracle’s capital expenditures for fiscal 2026 surged to approximately $56 billion, a 162% increase compared to the prior year. That spending spree pushed the company into negative free cash flow territory to the tune of about $24 billion, while total debt swelled to around $130 billion by late May 2026.
The AI spending arms race claims another victim
The company actually beat both revenue and earnings-per-share estimates in its June report. Didn’t matter. Shares plummeted more than 12% in a single session after the company revealed plans for continued elevated spending and floated the possibility of additional debt and equity raises for the next fiscal year.
On June 2, 2026, Oracle shares dropped 4.2% in premarket trading after Alphabet announced an $80 billion AI funding initiative.
