Oracle stock slides after earnings as steep AI spending bill spooks investors

Oracle reported fourth-quarter revenue of $15.1 billion in its Tuesday evening release, topping analyst expectations of $14.7 billion. Cloud infrastructure revenue grew 49% while remaining performance obligations - the company's contract backlog - climbed to $638 billion. That figure includes a five-year $300 billion deal signed with OpenAI.

But the company also said it plans to raise another $20 billion in debt to fund AI data-center build-out. That would push Oracle's total debt to roughly $110 billion. CFO Safra Catz said capital expenditure would rise above $45 billion in fiscal 2027 from $35 billion this year. Bernstein analyst Mark Moerdler wrote that combined with higher financing costs, free cash flow could turn negative.

Shares fell about 7% in the after-hours session, compounding Tuesday's 6% regular-session drop for a two-day decline of roughly 13%. Wedbush analyst Dan Ives called the selloff an overreaction, arguing the OpenAI contract cements Oracle's place in the AI infrastructure market. Goldman Sachs reiterated a broader capital-intensity warning for the sector. Not investment advice.