Oracle Stock Tumbles on AI Spending

Oracle Corporation's shares tumbled 12% on Thursday, wiping off approximately $72 billion from its market value, due to investor concerns over its surging capital expenditure and ballooning debt load. The company is aggressively building out AI infrastructure, securing deals with entities like OpenAI and Meta Platforms, to compete with rivals such as Amazon and Microsoft. However, Oracle Corporation's lack of large cash flows, unlike its hyperscaler competitors, forces it to burn cash and raise significant debt and equity. It expects net capital expenditure of around $70 billion in the current fiscal year and up to $95 billion in fiscal 2027, planning to raise another $40 billion in debt and equity. This has deepened its free cash flow deficit to $23.7 billion in fiscal 2026. The stock drop also negatively impacted the European IT sector, with shares of SAP and Capgemini declining.