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2025-12-16 20:17:48
[The Cost of AI Frenzy: Oracle's Billion-Dollar Debt Financing Triggers Credit Alarm] ⑴ Oracle's aggressive AI capital expenditure plan has brought its bonds into the market spotlight, with investors scrutinizing the potential cracks behind the AI boom. ⑵ JPMorgan's credit analysts point out that the pressure on the company's bonds is expected to persist into 2026. ⑶ Last week, Oracle's stock price suffered its biggest weekly drop in nearly 11 months, and its credit risk index also climbed to a 16-year high. ⑷ The immediate cause of market concerns was the company's latest earnings report: revenue fell short of market expectations, while the company significantly increased its annual capital expenditure target by $15 billion and more than doubled its future lease commitments. ⑸ The company's co-CEOs stated their commitment to maintaining an investment-grade debt rating and indicated that the actual borrowing size may be lower than analysts' predictions of over $100 billion. ⑹ However, analysts point out that the real challenge for investors lies in management's plan to continue relying almost entirely on debt to finance its massive investments. (7) Against the backdrop of uncertainty regarding the specific timeline and upper limit of investment returns, this debt-dependent financing strategy has caused frustration and concern in the market.
