Oracle Under Investigation Over AI CapEx Disclosures as Market Awaits June 10 Results
03.06.2026 - 15:34:12 | boerse-global.de
Oracle is navigating a dual challenge this week: a legal probe into its management’s handling of AI investment guidance, and a sharp pullback in its stock after a blistering five-session rally that briefly pushed the company’s market cap above $700 billion.
The US law firm Kuehn Law has launched an investigation into Oracle’s leadership, alleging that executives may have misled investors about the rationale behind the company’s aggressive AI infrastructure spending. The inquiry targets shareholders who bought shares before June 12, 2025, and focuses on whether the massive capital outlays — now projected to reach roughly $100 billion by 2027, far above the earlier estimate of around $71 billion — have been justified by revenue growth. Potential risks to Oracle’s debt levels, credit rating and free cash flow are also under scrutiny.
The legal news landed in an already fragile market. The Nifty IT index fell nearly 6% on Wednesday, and Oracle’s shares dipped 3% to 4% during the session, trading at roughly €205. The retreat came after the stock had rocketed almost 28% in just five trading days. Despite the reversal, the equity is still up about 25% over the past week and has gained nearly 23% year to date.
All eyes are now on Oracle’s fiscal fourth-quarter earnings, due after the US market close on Wednesday, June 10. The company has guided for earnings per share of $1.96 to $2.00 on revenue growth of 19% to 21%. Wall Street’s consensus stands at $1.96 EPS and $19.1 billion in revenue. The conference call is scheduled for 11 p.m. German time.
Should investors sell immediately? Or is it worth buying Oracle?
The last quarterly report set a high bar. In the third quarter, total revenue jumped 22% to $17.2 billion. Cloud revenue surged 44% to $8.9 billion, led by cloud infrastructure, which posted $4.9 billion in revenue — an 84% increase. The key forward-looking metric, remaining performance obligations, hit $553 billion, up 325% year over year, with the vast majority attributed to large-scale AI contracts.
While the legal probe adds an element of uncertainty, some analysts remain bullish. Scotiabank raised its price target on Oracle from $215 to $290 and reiterated an “Outperform” rating, citing the company’s role as a critical provider of cloud infrastructure for AI workloads. They argued that near-term volatility is already priced in and that the risk-reward profile remains attractive.
The sustainability of Oracle’s spending plan is also a focus. In February, the company announced it would raise up to $50 billion through debt and equity. So far, $30 billion has been collected via bonds and mandatory convertible preferred shares, while the equity component of the program has yet to be launched. For fiscal 2026, Oracle plans $50 billion in capital expenditures against projected revenue of $67 billion — a margin profile that will be closely watched as debt service costs rise.
Oracle at a turning point? This analysis reveals what investors need to know now.
Co-founder Larry Ellison, who holds roughly 40% of the company’s stock, saw his net worth estimated at around $300 billion, briefly making him the world’s third-richest person. The stock currently trades at €207, down 1.55% from the previous day, valuing the company at roughly $712 billion and leaving it with a price-to-earnings multiple of 44.
How management addresses the CapEx questions on the June 10 call will likely determine the market’s near-term reaction. The cloud demand must continue outstripping supply, and the backlog of AI contracts needs to translate into tangible revenue growth — all while capital costs are kept from choking profit expansion.
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