Oracle Stock Jumps 18.2% Amid Debt Concerns, AI Expansion

Oracle stock rallied dramatically as of 08:24 UTC today, gaining 18.23% to trade at $225.78. The share price advance comes alongside a recent report flagging debt-level concerns as the company accelerates its artificial intelligence data center buildout. The stock has ranged between $208.02 and $226.29 during the session. Finance.yahoo.com reported on 29 May 2026 that concerns over use are weighing on the company.

Context — why this matters now

Oracle is executing a capital-intensive pivot to capture demand for AI cloud infrastructure. This strategic buildout requires billions in spending on hardware, real estate, and power contracts, pressuring its traditionally conservative balance sheet. The last time Oracle's debt metrics faced similar scrutiny was during its $28.3 billion acquisition of Cerner in December 2021, which increased its gross debt by approximately 65%.

The current macro backdrop features higher for longer interest rates, increasing the cost of new debt issuance and refinancing. The U.S. 10-year Treasury yield has hovered near 4.3% in recent weeks. The catalyst triggering the current focus on use is the scale and speed of Oracle's announced data center expansion plans, which market analysts estimate could require over $10 billion in annual capital expenditure for several years.

This expansion is a direct response to competitive pressure from larger cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud. Oracle aims to carve a niche in high-performance AI training and inference workloads, a segment growing at over 50% annually. The company's ability to fund this growth while maintaining investment-grade credit ratings is a key investor debate.

Data — what the numbers show

Oracle's market capitalization increased by approximately $55 billion during today's trading session, based on its share price move to $225.78. The company's reported net debt stood at roughly $76 billion as of its last quarterly filing. Its debt-to-EBITDA ratio is estimated to have expanded to nearly 3.5x, up from below 2.0x prior to its major acquisition phase.

Metric	Pre-Cerner Acquisition (FY21)	Current Estimate (FY26)
Gross Debt	~$69 billion	~$95 billion
Debt/EBITDA	~1.8x	~3.5x
Interest Coverage	>10x	~5x

This use profile contrasts with cloud software peers like Salesforce, which maintains a net cash position, and even infrastructure competitor Microsoft, whose Azure unit is supported by a corporate-wide AAA-rated balance sheet. Oracle's capital expenditure is projected to reach $12 billion for its current fiscal year, more than double its average annual spend from 2018 to 2022. The S&P 500 Information Technology sector is up 8% year-to-date, while Oracle's year-to-date performance, even with today's surge, trails that benchmark.

Analysis — what it means for markets / sectors / tickers

The surge in Oracle shares indicates investor focus on AI revenue potential over near-term balance sheet deterioration. This dynamic directly benefits semiconductor and hardware suppliers like Nvidia (NVDA), whose H100 and Blackwell GPUs power these data centers, and Arista Networks (ANET), which provides high-speed networking. It also supports utilities and power generation firms in regions where Oracle is building, such as Arizona and Ohio.

A key risk is that Oracle's aggressive spending fails to generate sufficient cloud revenue growth to improve credit metrics, potentially leading to a ratings downgrade. Moody's and S&P Global rate Oracle's senior unsecured debt at Baa1 and BBB+, respectively, with stable outlooks. A downgrade could increase its debt servicing costs by 50 to 100 basis points on new issuance.

Positioning data shows hedge funds have been net sellers of Oracle shares in recent quarters, while long-only institutional investors have been adding to positions. The flow today suggests short covering amplified the rally, as bears betting on debt concerns were forced to exit positions. Capital is rotating from mature, cash-cow software segments into companies with clear AI infrastructure exposure, even those with leveraged balance sheets.

Outlook — what to watch next

The next major catalyst is Oracle's fiscal fourth-quarter earnings report, scheduled for 17 June 2026. Investors will scrutinize cloud revenue growth, especially for its Infrastructure as a Service unit, and any updated capital expenditure guidance for fiscal 2027. Management commentary on the timeline for achieving leverage ratio targets will be critical.

A second catalyst is any credit rating action from Moody's or S&P Global, which typically follows earnings releases or significant new debt announcements. The key level for Oracle's 10-year bonds is a yield spread of 150 basis points over Treasuries; a sustained break above that could signal escalating credit market concern.

Technically, Oracle stock faces immediate resistance at its intraday high of $226.29. A sustained close above this level could open a path toward its all-time high near $240. Support is established at the $208 level, which was today's low. The 50-day moving average, currently near $200, provides a broader support zone.

Frequently Asked Questions

What does Oracle's high debt mean for dividend payments?

Oracle has consistently paid and grown its dividend for over a decade. The current annual dividend is $1.60 per share, costing the company about $4.3 billion annually. While the dividend is a priority, a significant ratings downgrade or acute cash flow pressure could lead the board to reconsider dividend growth, though an outright cut is considered unlikely in the near term. The payout ratio remains below 40% of estimated earnings.

How does Oracle's AI buildout compare to Microsoft's and Google's?

Microsoft and Google parent Alphabet fund their cloud expansions primarily from massive operating cash flows, with minimal net debt. Oracle is using substantial debt financing to close the infrastructure gap, making its strategy higher-risk, higher-reward. Microsoft's Azure and Google Cloud are broader platforms, while Oracle is targeting specific, high-margin AI and database workloads, a more focused but potentially less defensible niche.

What is the historical precedent for tech companies carrying high debt for growth?

IBM in the early 1990s and Intel during its fab construction cycles are historical examples of capital-intensive tech strategies funded by debt. More recently, AT&T's debt-fueled acquisition of Time Warner in 2018 serves as a cautionary tale of use hindering strategic agility during market shifts. Oracle's situation is unique due to the proven, immediate demand for AI capacity, which may justify the risk faster than in prior cycles.

Bottom Line

Oracle's stock surge highlights the market's current preference for AI growth narratives over near-term credit concerns, but the underlying use poses a persistent risk.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.