Oracle’s credit risk profile worsened following its most recent earnings results, with market gauges showing a noticeable increase in the cost of insuring the company’s debt. The shift came even as Oracle posted an earnings beat, as investors focused instead on the growing financial burden tied to its cloud and AI infrastructure expansion.
Credit default swap spreads on Oracle’s debt rose toward multi-year highs, signaling heightened caution among bondholders. Analysts say the company’s rapid increase in capital expenditures, along with higher reliance on debt financing, contributed to the deterioration in its risk metrics. Slower-than-expected revenue momentum also played a role in amplifying investor concerns.
The development highlights a broader market debate over how aggressively large tech companies should fund AI-driven growth. For Oracle, the balance between maintaining its investment-grade credit standing and scaling its data-center footprint is becoming increasingly scrutinized as debt costs rise.
