By Khac Phu Nguyen
Publication Date: 2025-12-10 17:22:00
This article first appeared on GuruFocus.
Three months ago, Oracle (NYSE:ORCL) delivered One of the most memorable trading days in its modern history after a stunning earnings outlook sparked overwhelming enthusiasm for its cloud momentum. That moment has now turned into caution. Since hitting an all-time high on Sept. 10, the stock has fallen 33% as investors reassess the durability of Oracle’s aggressive investment cycle and the circular nature of some financing structures related to its data center expansion. Portfolio managers expect the company could weigh on its balance sheet as negative free cash flow and elevated leverage would overshadow the positive headlines from today’s quarterly results. Options traders are bracing for a significant reversal following the results, with pricing implying a possible 10% move in either direction.
Debt risk has now become the central storyline. Oracle has issued tens of billions of dollars in bonds, both directly…
