Oracle has had better weeks. On July 9, S&P Global Ratings cut Oracle’s long-term issuer credit rating to BBB-, placing the enterprise software giant exactly one notch above junk territory. The stock responded accordingly, falling to a 52-week low of around $120.39, a number that looks especially painful when you remember Oracle was trading at $345.72 not so long ago.
That’s a drawdown of roughly 65% from peak.
What actually triggered the downgrade
S&P flagged escalating business risks tied to Oracle’s push into data centers and AI compute capacity, with projected expenditures running into the hundreds of billions. Capital-intensive bets of that scale tend to compress cash flow, and compressed cash flow is exactly the kind of thing that moves credit ratings in the wrong direction.
There’s a concentration risk angle here too. OpenAI is believed to account for roughly half of Oracle’s relevant cloud revenue. If that relationship shifts, Oracle’s revenue picture shifts with it.
