Larry Ellison after seeing Oracle being linked to the AI bubble every time it’s mentioned on Twitter:

Oracle is getting absolutely steamrolled this quarter. Shares are down 30%, pacing toward their worst three-month stretch since checks calendar 2001… aka the dot-com era, when frosted tips and YOLO’ing into Pets.com both felt like good ideas (spoiler alert: they weren’t).

Obviously this is not ideal timing, considering ole Larry “I’ll be on my yacht” Ellison just handed the keys to two new CEOs.

Clay Magouyrk and Mike Sicilia took over roughly three months ago, and so far their debut has looked less like a victory lap and more like trying to parallel park an aircraft carrier. The stock’s been in freefall, investors are getting antsy, and Wall Street is suddenly asking a question nobody wants to answer out loud: Did Oracle just YOLO itself into the AI arms race?

(Source: CNBC)

So what went wrong? Short answer: debt. Long answer: a truly biblical amount of debt. Oracle signed up to help power OpenAI’s infrastructure dreams (to the tune of $300B+ in commitments) then followed it up with plans for $50B in capex, $248B in lease obligations, and one of the biggest bond sales in tech history ($18 BILLION big ones).

Shareholders heard all that, picked up the phone, and called Oracle’s customer service hotline to ask the obvious: “Wait… who’s paying for this?”

On the last earnings call, Oracle missed revenue expectations by about $300M, free cash flow disappointed, and management calmly explained that spending would ramp even more next year. Not ideal when your balance sheet already looks leveraged to the gills. “Yeah I know we had a bad quarter and didn’t provide any solutions to improve our numbers… but hey, did we mention we’re doubling down in 2026?”

All of this is scary because earlier this year Oracle was floating on what Snoop Dogg would call cloud nine. The Stargate AI joint venture with OpenAI and SoftBank got the full Oval Office rollout, the stock was suddenly being mentioned in the same breath as Palantir (cult following and all), and cloud optimism copium was flowing freely. Larry Ellison even flirted with “world’s richest person” energy. Then reality showed up like “hey, did you miss me?”

To make a horrendous situation even worse… Oracle’s total debt jumped 40% YoY to $124B and cash outflows (aka bills) piled up on the kitchen counter. But then came the real “we’re f***ed” moment… when analysts realized most of Oracle’s future AI revenue is basically tied to OpenAI hitting every impossible milestone they’ve set. When investors realized that detail, the stock fell off a cliff.

Credit markets noticed too. Oracle’s credit default swaps have widened sharply (never a great sign) as traders quietly price in the possibility that all this AI spending might take… longer… to pay off. Or worse, might not pay off at all.

And you know how anytime there’s a tweet about fraud, Sam Bankman-Fried somehow ends up as an honorable mention? Same deal here. Whenever “AI bubble” talk starts making the rounds, Oracle is the first name that comes up. Translation: when the inevitable AI recession hits, Oracle’s probably the first to lose its job and wind up in the soup line.

Of course, Oracle’s excuse for getting themselves into this position is that data centers cost real money… unfortunately for them, that’s money they don’t exactly have lying around. AI monetization remains fuzzy, and unlike Microsoft or Alphabet, Oracle doesn’t have much margin for error. Translation: if demand slips, contracts get renegotiated, timelines stretch, things get uncomfortable fast.

Despite all this, Oracle says it can repurpose AI infrastructure if clients flake. Wall Street is politely nodding while backing away slowly.

So yeah, Oracle stock is down bad. And very much to Larry’s disgust, the bears (cough: Michael Burry) are licking their chops, while new management stares down one of the most leveraged AI bets in all of tech.

Could Oracle pull it off? Sure… they’ve done it before. But right now this feels a lot like when your favorite NFL team drafts a new quarterback. Everyone talks themselves into it, jerseys get bought, hope is in the air… and you won’t know whether he’s the franchise savior or a full-blown dumpster fire until next year.

At the time of publishing this article, Stocks.News holds positions in Microsoft and Alphabet as mentioned in the article.