Oracle stock has worst week since 2001 dot-com bust as AI financing concerns escalate

June 27, 2026 - 04:24

Oracle shares posted their steepest weekly decline since the 2001 dot-com bust, as investors grew increasingly uneasy about the company's massive financial commitments to artificial intelligence. The stock's slide reflects mounting concerns over Oracle's aggressive spending, which has led to negative free cash flow and a staggering $130 billion debt load.

The software giant has been pouring capital into cloud infrastructure and AI data centers to compete with rivals like Amazon and Microsoft. However, the market is now questioning whether these investments will generate sufficient returns. Oracle's free cash flow turned negative in the most recent quarter, a red flag for investors who had previously cheered the company's AI pivot. The company's debt pile, largely accumulated through acquisitions and infrastructure buildout, now stands at levels not seen since the tech bubble burst.

Analysts note that while Oracle's cloud business is growing, the cost of that growth is straining its balance sheet. The company's capital expenditures have surged, and its operating margins have come under pressure. For a stock that had been a darling of the AI trade, the reversal has been sharp. The weekly loss erased billions in market value and left shareholders questioning the sustainability of Oracle's strategy.

The selloff underscores a broader shift in sentiment toward AI-related stocks. Investors are no longer rewarding companies simply for spending on AI; they want to see clear paths to profitability. Oracle, with its heavy debt and cash flow challenges, appears particularly vulnerable to this new scrutiny.