Oracle has lost a third of its share price since its series of highs in September of 2025, losing almost $500 billion of its market value despite AI contracts becoming larger. 

The company was worth more than $933 billion, at its peak, due to the hype associated with AI, but currently, as of March 10, 2026, shares are trading just under $150.6, indicating investor concern over liquidity pressures and constant capital spending.

Strong Quarterly Performance

In the second quarter of the fiscal year, 2026, revenue has grown by 3.4% with cloud-service revenue increasing 28% to $7.2 billion and Oracle Cloud Infrastructure (OCI) revenue expanding 55% to $3.3 billion. 

The first quarter’s GAAP operating income was $4.3 billion. Non-GAAP operating income increased 9% Y-O-Y in dollars and 7% in constant currency. GAAP net income totaled $2.9 billion. Non-GAAP net income totaled $4.3 billion, up 8% in dollars and 6% in constant currency. 

Short-term deferred revenues totaled $12.1 billion. Operating cash flow increased by 13% over the previous year to $21.5 billion.

Cash Burn Sparks Panic

However, the Oracle announcement of increasing its capital expenditure of $50 billion on artificial-intelligence data centers in its fiscal year 2026 was frowned upon by Wall Street as it signified several years of negative free cash flow. 

Oracle, like the other hyperscalers, has used bonds to raise capital, with a total debt of $92.6 billion at the end of the most recent fiscal year. The figure increased to $108.1 billion in the first half of the current fiscal year, following a massive September 2025 issuance of $18 billion in notes maturing from 2030 to 2065. 

Oracle has also disclosed an additional $248 billion in future data center lease obligations that are not yet on its balance sheet, which it hopes will translate into increased customer demand and revenues. Last quarter, co-CEO Clay Magouyrk sought to reassure investors about the company’s future capital needs.

Road Ahead

Oracle needs to take an essential strategic re-alignment: transforming the backlog into a steady stream of cash before the curve of debt forces rating degradations or watered-down growth curves. 

A successful implementation would cement Oracle into the AI ecosystem on the cloud against hyperscalers, whereas failure may put the balance sheet at risk of a shrinkage of interests amid declining interest in AI. 

This is the moment where investors are insisting on empirical data other than speculations.