By Trefis Team
Publication Date: 2026-01-13 10:15:00
CHINA – December 27, 2025: In this illustration, the Oracle logo is seen on the screen of a tablet. (Photo illustration by Sheldon Cooper/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Oracle stock (NYSE: ORCL) is down 11% over the past six months, while the broader S&P 500 index is up 11%. What is contributing to this underperformance? Investors are particularly concerned about two problems:
- The company’s significant reliance on debt to fund its major AI data center expansion and
- There are doubts as to whether the significant order backlog can actually be converted into revenue quickly enough.
The debt situation is alarming
Oracle’s debt has increased from $93 billion in fiscal 2024 (the fiscal year ends in May) to $124 billion in the most recent quarter (Q2 of fiscal 2025). While Oracle’s operating cash flow margins have improved – from 35.3% in the 2024 financial year to 36.5% – there is an expectation that this value …
