Oracle shares plunged 4.29% in pre-market trading as legal challenges and tech sector selloff drive decline

Oracle shares plunged 4.2909% in pre-market trading on January 15, 2026, amid a broader technology sector selloff and a mounting legal challenge. The decline mirrored a 1.7% midday drop in the Nasdaq 100, reflecting heightened market anxiety over tech stocks.

The stock’s decline was exacerbated by a proposed class-action lawsuit filed by bondholders in a Manhattan court. Investors who purchased $18 billion of Oracle’s debt in September allege the company failed to disclose its need for additional borrowing to fund artificial intelligence infrastructure. The lawsuit names Oracle, co-founder Larry Ellison, and the company’s banks as defendants, accusing them of inadequate transparency that allegedly caused financial losses.

Oracle’s aggressive AI expansion, including a $300 billion, five-year contract with OpenAI, has intensified scrutiny over its debt strategy. The company raised $18 billion in bonds in September, followed by an additional $38 billion in October, prompting bondholders to argue that the rapid capital raises were not adequately communicated. This has raised concerns about Oracle’s leverage and the sustainability of its AI infrastructure investments.

Investor sentiment has shifted as Oracle’s stock faces pressure from both sector-wide weakness and company-specific risks. Legal challenges and governance changes, including recent board member departures, have further fueled skepticism about the company’s ability to balance growth ambitions with financial discipline. The lawsuit and related uncertainties underscore the growing scrutiny of Oracle’s capital-intensive AI strategy in a high-interest-rate environment.

Analysts have also turned their attention to Oracle’s debt-to-equity ratio and its capacity to service its growing interest obligations. The company’s financial discipline has been questioned given its rapid accumulation of debt, particularly during a period of historically elevated interest rates. These concerns are echoed in the bond market, where Oracle’s credit spreads have widened in recent weeks.