Oracle (ORCL) shares plunged 5.4% as Blue Owl Capital exits $10 billion data center funding.

Oracle (ORCL) shares plunged 5.4% in pre-market trading on December 18, 2025, amid growing concerns over financing challenges for its Michigan data center project. The sell-off intensified after reports indicated private lender Blue Owl Capital, a key partner, would not back the $10 billion initiative, casting doubt on Oracle’s ability to secure funding for its AI infrastructure expansion.

The failed deal with Blue Owl, which had previously supported Oracle’s data center ventures in Texas and New Mexico, exacerbated investor anxieties. Oracle’s aggressive capital expenditures—driven by AI and cloud infrastructure—have strained its balance sheet, with lease obligations exceeding $248 billion and recent debt issuance surpassing $124 billion. Despite claims from Oracle’s spokesperson that a new equity partner is in negotiation, the market reacted cautiously, reflecting heightened scrutiny over the company’s debt-laden growth strategy.

Oracle’s bond spreads have widened to levels reminiscent of the 2009 financial crisis, signaling elevated credit risk. The stock, down nearly 46% from its September peak, now trades at a 48% discount to its 52-week high. Analysts have trimmed price targets, though long-term optimism persists around AI demand. However, near-term execution risks and rising capital costs remain critical headwinds, with the stock trading below key moving averages and facing renewed pressure ahead of potential project delays.

Oracle’s financials show an alarming imbalance between capital outlays and returns, with net income trailing behind operating cash flows for the past three quarters. The company has also seen an uptick in short interest, suggesting bearish sentiment. Given these pressures, investors remain cautious about Oracle’s ability to maintain growth without further capital injections or restructuring measures.