Oracle experienced its worst week on Wall Street since the 2001 dot-com bust, with its stock dropping 19% over the week ending June 26, 2026. The stock fell at least 2.6% each day, marking the steepest weekly decline since a 20% plunge in August 2001. This sharp selloff comes as investors grow increasingly concerned about Oracle's mounting debt load and the viability of its substantial investment in artificial intelligence infrastructure, particularly its commitments to OpenAI [1].
Over the past nine months, Oracle's market capitalization has plummeted from a peak of $900 billion in September to a loss of about 55% of its value. The company ended May with approximately $130 billion in debt, and capital expenditures surged 162% to nearly $56 billion in the 2026 fiscal year. Oracle reported negative free cash flow of almost $24 billion for the latest fiscal year. To fund its AI ambitions, Oracle plans to raise $40 billion in fiscal 2027 through debt and equity financing, including a $20 billion share sale announced earlier. This follows $43 billion in debt sales and $5 billion from equity issuance in the previous fiscal year [1].
Despite these financial challenges, demand signals for Oracle's AI offerings remain strong, according to Evercore analysts, who continue to recommend buying the stock. FactSet data shows that 71% of analysts recommend buying Oracle, the highest percentage in 15 years. However, the company faces multiple headwinds, including hefty capital requirements and broader concerns that AI models may replace many of Oracle's software products. The iShares Expanded Tech-Software Sector ETF (IGV) is down 16% in 2026, while Oracle has fallen 24% [1].
Oracle's annual report revealed a 13% reduction in headcount to 141,000 employees in fiscal 2026, with significant cuts in sales and marketing. Leadership changes were evident as co-founder Larry Ellison was absent from the recent earnings call, leaving dual CEOs Clay Magouyrk and Mike Sicilia, along with new finance chief Hilary Maxson, to address investor concerns. Magouyrk commented, "Hilary has a tough life," highlighting the pressure on Oracle's financial leadership [1].
The decline in Oracle's stock price has also impacted the personal wealth rankings of its co-founder Larry Ellison, who has been surpassed by Google co-founders Larry Page and Sergey Brin, as well as Amazon's Jeff Bezos [1].
CONCLUSION
Oracle's stock has suffered a historic decline as investors question the sustainability of its aggressive AI investments and rising debt. Despite strong analyst support and ongoing demand for AI infrastructure, the company's financial risks and broader market headwinds have triggered significant volatility. The market remains cautious, with Oracle's future hinging on its ability to manage leverage and deliver on its AI strategy.