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Oracle shares have fallen more than 50% from their all-time high, yet Wall Street remains broadly constructive: 28 of 35 analysts rate the stock a Buy or Strong Buy, with a median price target suggesting roughly 60% upside.
Oracle’s financial leverage has increased sharply. Total debt has ballooned to $149 billion as of February 2026, nearly double the level from three years earlier. In the first nine months of fiscal 2026, the company issued $43 billion in new bonds, described as among the largest corporate debt raises of all time. Oracle also plans to raise an additional roughly $25 billion by selling common stock.
Credit default swaps (CDS) on Oracle debt have reached their highest level since 2008, indicating heightened market concern about default risk.
Oracle’s investment pace has exceeded its operating cash flow. Over the trailing 12 months, the company spent $48.2 billion in capital expenditures (capex), while generating about $23.5 billion in operating cash flow. That implies a free cash flow deficit of $24.7 billion.
The company’s AI infrastructure build-out depends on several factors going right, including the ability of its anchor partner, OpenAI, to pay for the compute Oracle has agreed to provide.
Oracle’s stock performance has reflected the volatility of this transition. The shares reached an all-time high near $346 last September, then fell by more than half, bottoming around $130 in early April. While the stock has rebounded somewhat, it remains down more than 50% from its peak.
Supporters point to Oracle’s large backlog and strong cloud growth. However, the bull case outlined in the source content requires timely completion of data centers, avoiding major bottlenecks in securing power, and ensuring OpenAI can fund the compute commitments.
The source also notes that OpenAI has been burning cash at a rapid pace and has already pulled back on some data center investments, potentially to improve its financial profile ahead of a potential IPO.
With debt rising quickly, CDS spreads at the highest level since 2008, and capex far exceeding operating cash flow, the source argues that long-term investors should avoid Oracle stock. The view presented is that the transformation effort is high-stakes and may be difficult to execute as assumed, despite Wall Street’s positive consensus.
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