What Happened?

Shares of enterprise software giant Oracle (NYSE: ORCL) fell 4.5% in the afternoon session after reports revealed that a critical $10 billion funding deal with Blue Owl Capital for a Michigan data center stalled. 

While Oracle disputed the narrative, claiming they selected a different equity partner, the reported reason for Blue Owl's exit sparked widespread anxiety: concerns over Oracle's ballooning debt and "unfavorable" terms. 

This specific deal failure illuminated a massive structural risk: Oracle was aggressively leveraging its balance sheet to fund the AI race. Investors grew increasingly concerned that hyperscalers relied more on risky private equity structures to build infrastructure rather than using their own capital. The market fear was that Oracle overextended itself financially to chase OpenAI's demands.

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What Is The Market Telling Us

Oracle’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock dropped 5.1% on the news that the company's stock continued to fall from the previous session as investors digested earnings results that raised concerns about heavy spending on Artificial Intelligence (AI) infrastructure. 

The drop extended a significant decline from the prior trading day when the stock plunged after the company reported mixed financial results. While Oracle beat earnings per share estimates, its cloud revenue and a key metric for future growth, remaining performance obligation (RPO), fell short of Wall Street's expectations. 

Compounding investor worries, the company announced a much more aggressive AI spending plan, raising its capital spending outlook for the fiscal year to about $50 billion. Investors seemed skeptical that the heavy spending on building AI data centers, funded partially by the company's large debt load, would quickly boost revenue and profits.

Oracle is up 8.7% since the beginning of the year, but at $180.43 per share, it is still trading 45% below its 52-week high of $328.33 from September 2025. Investors who bought $1,000 worth of Oracle’s shares 5 years ago would now be looking at an investment worth $2,836.

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