Oracle Shares Face Mounting Scrutiny Over AI Strategy

The fleeting nature of market enthusiasm for artificial intelligence is becoming apparent for Oracle. A notable shift in sentiment has emerged since the stock's peak in September 2025, driven not by a single misstep but by escalating concerns over the pace and profitability of its multi-billion dollar AI ambitions. The company's partnership with OpenAI and the underlying durability of those business arrangements are central to the current investor apprehension.

This reassessment has had a profound financial impact. According to Bloomberg, approximately $463 billion in market capitalization has been erased since the record high on September 10, 2025. During that period, Oracle's robust cloud business forecast and signals of strong AI demand propelled its valuation to surpass $933 billion. The investment landscape for AI across the technology sector has since grown more cautious. For Oracle, this scrutiny hits a nerve, as the firm is committing substantial capital to data center expansion while the market demands tangible financial returns sooner than anticipated.

Key Pressure Points: Spending, Partnerships, and Debt

Several interconnected factors are contributing to the pressure. A primary catalyst was the company's December report, which, as noted by Yahoo Finance, raised the capital expenditure forecast for fiscal year 2026 to around $50 billion—a nearly $15 billion increase from prior expectations. This sharp rise has intensified the central question: when will these massive outlays begin to yield a profitable return?

Simultaneously, market participants are raising questions about potential "circular deals" involving OpenAI, which remains unprofitable. The core concern, as articulated by an asset manager cited by Bloomberg, is that Oracle's share price may have disconnected from its fundamental business metrics, and investors now require clear evidence of progress.

Financing this aggressive infrastructure build-out has also affected the company's credit profile. A key measure of Oracle's credit risk climbed to its highest level since 2009 following the December figures, Bloomberg reported. This movement is linked to the company's issuance of tens of billions in bonds to fund its AI expansion.

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

Further uncertainty arose from reports that Blue Owl Capital was not involved in final negotiations for an equity agreement concerning a data center project in Michigan. Oracle has stated that discussions remain "on schedule."

Summary of Critical Issues:
* FY2026 Capex Forecast: Approximately $50 billion (a significant increase)
* Scrutiny of OpenAI transactions adds a layer of uncertainty
* Credit risk indicator reaches a peak not seen since 2009, per Bloomberg
* Questions surround Michigan data center financing (Oracle maintains timeline is intact)

The Path Forward: Q3 Earnings as a Crucial Test

All eyes are now on March 9, 2026, when Oracle is scheduled to release its third-quarter results for fiscal 2026, according to Nasdaq. Analysts polled by Barchart anticipate earnings per share of $1.36, compared to $1.18 in the prior-year period. This follows a quarter where the company's adjusted EPS of $2.26 substantially outperformed estimates of around $1.50.

Operationally, Oracle continues to push forward with its expansion plans. A company blog post dated January 26 detailed collaborative AI data center projects with OpenAI, including sites in Texas, New Mexico, Wisconsin, and Michigan.

The market's current skepticism, however, is clearly reflected in the stock's performance. Shares recently closed at €165.90, trading notably below the 200-day moving average and showing a decline of 15.88% over a 30-day period. The upcoming earnings report will be pivotal. Oracle must not only demonstrate growth but also provide a convincing roadmap for translating its heavy AI investments into profitable revenue streams in the near term.