Oracle shares ORCL have come under pressure as investors assess the financing requirements of the company’s artificial intelligence infrastructure expansion, although analysts at Cantor Fitzgerald and Evercore ISI believe concerns about its debt and growth prospects may be overstated.
Oracle shares fell 4% to $123.94, leaving the stock down 36% in 2026 and on course for its worst annual performance since 2001, according to Dow Jones Market Data.
The shares have declined 54% over the past 12 months, including a 16% drop over the past month.
The decline comes despite strong demand for Oracle’s services and continued growth in its backlog of contracted revenue, according to Cantor Fitzgerald analysts.
However, questions about borrowing costs, its reliance on OpenAI and the profitability of its AI investments have weighed on investor sentiment.
Oracle faces $76 billion financing requirement for AI expansion
Cantor Fitzgerald estimates that Oracle will need approximately $76 billion in additional financing through fiscal 2029 to fund its AI infrastructure buildout.
Raising that capital could become more expensive as yields on Oracle’s bonds have climbed roughly three percentage points above their original interest rates.
The cost of insuring Oracle’s debt has also increased, with some five-year credit-default-swap quotes approaching 300 basis points.
At that level, investors would pay approximately $300,000 annually to insure $10 million of Oracle debt against default over five years.
Oracle’s exposure to OpenAI is another source of uncertainty.
Cantor analysts estimate that the ChatGPT developer accounts for roughly half of Oracle’s remaining performance obligations, raising questions about OpenAI’s ability to generate sufficient revenue to meet its financial commitments.
Nevertheless, Cantor believes Oracle has time to strengthen its financial position.
The company’s more substantial debt repayments are not expected to begin until 2032, giving it several years to generate cash.
The analysts also identified upfront customer payments and arrangements in which customers provide their own AI hardware as potential ways to reduce Oracle’s borrowing requirements.
Analysts defend Oracle’s valuation amid AI debt concerns
Cantor Fitzgerald maintained its Overweight rating on Oracle and a $284 price target.
The target implies approximately 120% upside from Wednesday’s closing price.
The firm believes Oracle is positioned to benefit from AI demand through its data and application assets and an expanding graphics processing unit fleet within Oracle Cloud Infrastructure.
Cantor also expects cloud service providers to remain important in distributing AI capabilities across businesses.
Evercore ISI has similarly argued that Oracle is being affected by investor concerns that have weighed on more debt-dependent AI infrastructure companies, including CoreWeave and Nebius.
In a research note last week, Evercore analysts wrote: “Let’s be clear, Oracle isn’t a neocloud but it trades like one.”
Unlike neocloud providers that focus heavily on renting computing capacity, Oracle has an established software business that provides an additional revenue stream.
Evercore estimates that Oracle’s core software operations alone are worth approximately $100 per share, suggesting investors are assigning relatively little value to its expanding cloud infrastructure business.
Oracle analyst day could address financing questions
Oracle’s upcoming analyst day is expected to provide an opportunity for management to clarify how it plans to finance its AI expansion and address concerns about the profitability of its OpenAI contract.
Investors will be looking for greater visibility into the company’s capital requirements, financing strategy, and ability to convert its growing backlog into cash flow.
The debate reflects broader market concerns about the debt required to build AI infrastructure and the returns those investments can generate.
For Oracle, the central question is whether sustained demand for cloud and AI services can support its expansion without putting excessive pressure on its balance sheet.
While analysts see potential for a recovery in the stock, financing costs and the execution of its AI strategy remain important considerations.
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