$119.89. That's where Oracle (ORCL) landed on Thursday, its lowest print in over a year and more than 50% below the 52-week high of $345.72 hit just ten months ago. The collapse wiped roughly $213 billion from co-founder Larry Ellison's personal fortune.

The selloff traces back to one number: $21 billion. That's how much Oracle spent on capital expenditures in fiscal 2026, up from around $7 billion the year before. Management has already flagged more than $25 billion in capex for fiscal 2027. Investors are doing the math and not liking what they see, worried that AI data center returns won't arrive fast enough to justify the debt load.

That debt load just got more expensive. S&P Global Ratings cut Oracle's credit rating to BBB-, one notch above junk, which means higher borrowing costs on top of an already aggressive expansion plan. CLSA initiated coverage with a Hold and a $145 price target, estimating Oracle may need up to $500 billion in capital to reach its 2030 goals. A separate headache: a Wisconsin regulator upheld strict credit requirements for a data center project there, potentially forcing Oracle to post more than $7 billion in collateral. This kind of pressure on tech companies carrying heavy AI-related debt echoes the dynamics that sent Alphabet shares down 7% after its own negative free cash flow disclosure.

Still, the business itself hasn't cracked. Remaining performance obligations, essentially the contract backlog, hit a record $638 billion as of May 31, 2026. Oracle Cloud Infrastructure keeps signing large deals, and the company has leaned into partnerships rather than a direct fight with AWS, Azure, or Google Cloud. Twenty analysts revised earnings estimates upward heading into the next reporting period, and Guggenheim kept its Buy rating with a $400 price target after conversations with Oracle executives about the infrastructure build-out timeline. InvestingPro data puts the P/E at 21.18 and the PEG ratio at 0.62, with the RSI signaling oversold conditions. The stock was trading around $120.24, down 4.35% on the day.

This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security.