Oracle’s Q2 Earnings to Test Investor Confidence Amid AI Debt Concerns

Oracle faces a pivotal moment as it prepares to release fiscal second-quarter results on December 10. Analysts project adjusted earnings of $1.64 per share and revenue of $16.19 billion, reflecting year-over-year growth of 11.6% and 15%, respectively. The stock, despite a 33% gain year-to-date, has slumped 7.4% over the past month amid mounting worries over the company's escalating debt and customer concentration risks.

The tech giant's aggressive AI infrastructure investments have come at a steep cost. A record $18 billion jumbo bond sale in September catapulted Oracle to the top spot among non-financial investment grade debt issuers. Total debt now stands at $111.6 billion, up sharply from $84.5 billion a year earlier. This borrowing spree fuels both ambition and apprehension—while the $300 billion OpenAI deal and 359% surge in contracted revenue backlog to $455 billion showcase growth potential, skeptics question the sustainability of such Leveraged expansion.

October's 23% stock plunge, the worst monthly performance since 2001, underscores market jitters. The coming earnings report must demonstrate whether Oracle's AI bets can generate sufficient returns to justify its unprecedented debt load. Success could validate the company's high-stakes transformation; disappointment may amplify concerns about overleveraging in the AI Gold rush.