Companies

Oracle Stock Tumbles as Wall Street Shifts Focus to AI Debt Risks

Regulators, including the SEC, have also raised concerns, with active discussions underway about the risks AI poses to the financial system.
Oracle Stock Tumbles as Wall Street Shifts Focus to AI Debt Risks
US multinational computer technology company Oracle's logo is pictured at the Mobile World Congress in Barcelona, Spain, on Feb. 27, 2024. Pau Barrena/AFP via Getty Images
Panos Mourdoukoutas
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Oracle Corporation reported strong second-quarter fiscal 2026 earnings after the market closed on Dec. 10, driven by heavy demand for AI-related services. Yet the company’s stock tumbled as investors increasingly weighed the risks of its rapid, debt-financed expansion to meet AI-driven capacity needs.

The surge in spending on AI infrastructure has created a broader dilemma for markets: weighing the promise of high future payoffs against the risk that these investments may fail to deliver them, especially for firms that rely heavily on borrowing.

Panos Mourdoukoutas
Panos Mourdoukoutas
Author
Panos Mourdoukoutas is a professor of economics at Long Island University in New York City. He also teaches security analysis at Columbia University. He’s been published in professional journals and magazines, including Forbes, Investopedia, Barron's, IBT, and Journal of Financial Research. He’s also the author of many books, including “Business Strategy in a Semiglobal Economy” and “China's Challenge.”