Here's Why Oracle Stock Got Pummeled This Week
Key Points
Recent events between Nvidia and OpenAI have failed to allay market concerns.
Oracle successfully raised cash this week, but it hasn't yet satisfied the market.
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Oracle (NYSE: ORCL) stock declined 15.8% in the week to Thursday, 2 p.m. It's been another tough week for the company, and the stock is down almost 29% in 2026 at the time of writing. There's little doubt over what the problem is, and it boils down to its exposure to OpenAI.
Oracle's challenges are mounting
The spike in Oracle's credit default swap (CDS) pricing (the price to protect against a bond default) shocked the market in November, and unfortunately, it has stayed at elevated levels ever since. While the company's recent, successful $25 billion bond sale (part of a plan to raise $50 billion) allayed some fears, the market still has many concerns.
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Most of them center on its $300 billion deal with OpenAI and the fear that Oracle is burning cash to build out AI infrastructure for a customer that is burning through mammoth sums and is unlikely to be profitable until 2030. HSBC has estimated OpenAI needs more than $200 billion to fund its growth plans. Those fears weren't helped by Nvidia recently walking back an intent to invest $100 billion in OpenAI.
Oracle's class action lawsuit
To make matters worse, Oracle is facing a class action lawsuit by unhappy bond investors claiming the company failed to disclose its need for significantly more debt when issuing the debt that they (bondholders) bought.
Image source: Getty Images.
Where next for Oracle
Ideally, Oracle will raise more funds, and OpenAI will start receiving the funding it needs to support its growth. That would be good for Oracle and the AI market as a whole, but until that happens, the stock could be under pressure.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Oracle. The Motley Fool has a disclosure policy.
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