Oracle stock ended its worst week since 2001 as investors focused on financials

The Oracle just finished its worst week on Wall Street in 25 years as concerns continue to rise about the software company’s debt burden and whether its bet-house investment in artificial intelligence will pay off.

The stock is down 19% this week, and has fallen at least 2.6% each day over the past five days. The biggest weekly decline since a 20% drop in August 2001, during the dot-com boom.

The past nine months have been brutal for Oracle investors. After the company hit a market cap of $900 billion in September, amid growing interest in Oracle’s AI customers, the stock lost about 55% of its value. The crux of the problem is that in order for Oracle to fulfill its AI infrastructure commitments, especially in OpenAI, it has to raise record debt levels, creating balance sheet risks while focusing on low-margin offerings.

Oracle was sitting on about $130 billion in debt at the end of May, and capital expenditures rose 162% to about $56 billion in fiscal year 2026. There is a rush to open data centers around big clouds Amazon, Microsoft again Googlebut without being able to sell a full technology stack like its competitors.

Oracle recorded negative free cash flow of nearly $24 billion in the most recent fiscal year. Earlier this month, Oracle said that, in the 2027 fiscal year, it plans to raise $40 billion in debt and financing, including a previously announced $20 billion equity sale, after a $43 billion debt sale and $5 billion from equity issuance last year.

“We expect funding/equity and the pace of equity issuance to remain an investor debate in the medium to near term, as demand signals remain strong,” Evercore analysts, who recommend buying the stock, wrote in a paper Wednesday.

Like Evercore, many firms remain active in Oracle’s prospects despite growing investor concerns. According to FactSet, 71% of analysts recommend buying the stock, the highest percentage in 15 years.

Oracle did not respond to a request for comment.

Oracle faces many market conditions. In addition to its huge capital needs, the company is trading under a selloff in software names as investors worry that AI models will replace many of their products’ capabilities. I iShares Expanded Tech-Software Sector Exchange-Traded Fund (IGV) is down 16% year to date through 2026, while Oracle is down 24%.

In its annual report last week, Oracle revealed that the number of employees fell by 13% to 141,000 in fiscal 2026, with a significant decline in sales and marketing.

Larry Ellison, the founder of Oracle, was not on the earnings call this month, leaving two chief executives Clay Magouyrk and Mike Sicilia and recently appointed chief financial officer Hilary Maxson to answer questions.

“Hilary is having a hard time,” Magouyrk said on the phone.

Because of Oracle’s declining stock price, Ellison was overtaken in the list of the richest people in the world by Google co-founders Larry Page and Sergey Brin, Amazon founder Jeff Bezos and Michael Dell. Ellison is still worth over $200 billion.

Oracle is moving forward with its construction plans, targeting data centers in Michigan, New Mexico and Texas by 2027.

“As we pursue these opportunities, we will remain focused on sound capital allocation, maintaining a strong balance sheet, and maintaining our investment grade ratio,” Maxson said on an earnings call this month.

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