Oracle Shares Plunge 10.83% as AI-Driven Costs and Debt Concerns Weigh on Earnings

Oracle shares plummeted 10.83% in pre-market trading on December 12, 2025, marking one of the company’s steepest intraday declines in over two decades. The selloff followed a mixed quarterly report highlighting soaring AI infrastructure costs and revenue that fell short of estimates, despite a record $523 billion in remaining performance obligations (RPO) tied to AI contracts.

The tech giant reported capital expenditures of $12 billion for its fiscal second quarter, far exceeding the $8 billion forecast and more than tripling the $4 billion spent in the prior year. Oracle also raised its full-year capex guidance to $50 billion, signaling aggressive investments in cloud infrastructure. While cloud revenue surged 68% to $4.1 billion, driven by AI demand, the company’s $16.06 billion total revenue missed analyst projections of $16.21 billion.

Analysts noted Oracle’s heavy reliance on debt to fund its AI ambitions, with total debt climbing to $111.6 billion. The stock’s sharp decline mirrored broader concerns about AI-driven tech valuations and debt sustainability, as Oracle’s credit default swap prices hit a 14-year high. Despite the sell-off, Wall Street analysts remained cautiously optimistic, citing long-term AI potential. William Blair’s Sebastien Naji called Oracle a “major beneficiary” of the AI shift but warned of risks tied to its OpenAI partnership and debt load.

Investors are now weighing Oracle’s growth trajectory against its financial strain. While the company’s AI cloud infrastructure and RPO figures underscore future potential, the recent volatility reflects skepticism over whether its aggressive spending will translate into profitability. The stock’s 40% drop from its September peak has intensified scrutiny of its debt-fueled expansion strategy in the AI era.