Oracle shares hit 14-month low as debt and Open AI deal execution risks raise concerns
The company's shares fell to a 14-month low on Monday as investors raised concerns about its high debt levels and execution risks on major projects including a $300 billion OpenAI deal, leading to a downgrade of its credit rating. Oracle shares fell more than 6% on Monday to close below $92, hitting their lowest level since May 2025. The stock has fallen approximately 31% this year. The stock fell about 0.8% in pre-market trading on Tuesday. Market concerns mainly focus on two aspects. First, Oracle is advancing a $300 billion data center construction cooperation with OpenAI. This large-scale investment plan will significantly increase the company's debt burden. Second, investors are skeptical that Oracle can effectively execute such a massive infrastructure expansion. Although Oracle continues to invest in cloud computing and AI infrastructure, including providing computing power to OpenAI, the financial pressure it faces is intensifying. Companies need to maintain a balance between seizing AI growth opportunities and maintaining financial stability, and the market is currently cautious about this. Just last week, OpenAI was reorganized into a for-profit public welfare enterprise. After the reorganization is completed, the OpenAI Foundation holds approximately 26% of the shares of OpenAI Group, with a valuation of approximately US$130 billion. As an important computing power partner of OpenAI, Oracle's contract performance capabilities will directly affect the development pace of this AI giant.