Oracle’s Growth Ambitions Face a Costly Reality Check

Oracle Corporation finds itself at a critical juncture. The technology giant's aggressive push into artificial intelligence and a high-profile partnership with TikTok's U.S. operations are capturing headlines, but investors are growing increasingly wary of the staggering price tag attached to this strategy. Mounting capital expenditures and newly revealed balance sheet risks have sparked concerns over financial stability, applying significant downward pressure on the company's share price.

The immediate focus for Wall Street has shifted to Oracle's ballooning capital costs. For fiscal year 2026, the company has dramatically increased its capital expenditure (CapEx) forecast to $50 billion. A substantial $12 billion was deployed in the second quarter alone to expand data center capacity, driven in large part by a major scaling of its partnership with OpenAI in the United States.

To help fund this enormous capital requirement, financial investor Blackstone is reportedly considering an expansion of its involvement with Oracle, a move that could provide the firm with additional short-term financial flexibility.

A TikTok Partnership with Strategic Implications

On January 23, 2026, the joint venture "TikTok USDS" was formally established. Oracle secured a 15 percent stake and will serve as the "Trusted Security Partner" for the data of over 200 million American users. While the estimated $2.1 billion value of the stake is financially secondary for a corporation of Oracle's scale, the deal strategically reinforces its position as a provider of secure cloud infrastructure.

Should investors sell immediately? Or is it worth buying Oracle?

Balance Sheet Concerns Unnerve the Market

The cost of these ambitions is being reflected in the stock's performance, with shares currently trading approximately 40 percent below their 52-week high. Beyond its official debt of nearly $108 billion, recent regulatory filings have uncovered massive future obligations.

Leasing liabilities for data centers and cloud capacity, not yet recorded on the balance sheet, recently surged to $248 billion—a staggering 148 percent increase within a single quarter. Analysts also point to a concentration risk: a significant portion of the impressive $523 billion backlog is tied to the contract with OpenAI.

The Upcoming Earnings Catalyst

All eyes are now on March 9, 2026. In its upcoming quarterly report, Oracle must demonstrate it can convert its record-breaking backlog into profitable revenue swiftly enough to cover immense ongoing costs and alleviate mounting market skepticism.