Oracle Bonds Face Pressure as Debt-Fueled AI Expansion Raises Concerns

Oracle Corporation's bonds are under selling pressure as the tech giant contemplates adding $38 billion in new debt to fund aggressive cloud and AI infrastructure expansion. The potential borrowing would compound its existing $104 billion debt load, including $18 billion in bonds. Investors are growing wary of the company's Leveraged growth strategy despite its partnerships with AI leaders like OpenAI.

The market reaction has been swift: Oracle's 2033 bonds saw yields rise over three basis points in two weeks, while its 2032 issuance climbed nearly two basis points in just seven days. "There's clear selling pressure," noted credit analyst Stu Novick, reflecting investor skepticism about Oracle's capital-intensive approach.

Morgan Stanley's Lisa Shalett contextualizes the MOVE as part of a broader tech sector trend where companies balance massive AI investments with shareholder returns. But bond markets appear less forgiving than equity investors when it comes to leveraged growth plays in the competitive AI infrastructure race.