Oracle Stock Plummets 55% Amid AI Infrastructure Spending Concerns
Oracle shares have nosedived 55% from their 2025 peak of $345.72, as investors grow wary of the company's aggressive AI infrastructure investments. The cloud computing giant's $300 billion deal with OpenAI—representing 58% of its contractual backlog—has raised red flags about debt sustainability and client concentration risk.
The five-year agreement commits Oracle to deliver 4.5 gigawatts of annual computing capacity to OpenAI starting in 2027. Bernstein maintains an Outperform rating but slashed its price target to $313, citing funding uncertainties as Oracle prepares to raise $45-$50 billion in fresh capital against $100 billion existing debt.
Market observers question the viability of OpenAI's projected $115 billion burn rate through 2029. Oracle's transformation into an AI infrastructure play comes at a precarious moment, with its balance sheet leverage now overshadowing cloud growth prospects.
