Oracle Sold at 116% Profit: Strong Company, But High Debt and AI Uncertainty
Oracle's situation is two-sided: On one hand, the company has a stable business, a well-known brand, and a massive contract and customer base. On the other hand, debt is high, and AI investments require success and cash flows.
The risk is significant β not necessarily a full threat of collapse, but a clear challenge: If markets are favorable and AI revenue materializes, Oracle can succeed in growing its profitability. However, if competition drives down AI service prices or investment returns fall short of expectations, the debt burden becomes unsustainable. Oracle is taking on $18 billion in additional debt this year for AI infrastructure, and the OpenAI deal could require up to $100 billion in additional debt over the next four years. Meanwhile, the company's net cash flow has collapsed by over 50% and free cash flow is negative. If AI revenues are delayed or fall short of expectations, the company will have to finance massive interest payments with deteriorating profitability β a scenario that could lead to credit rating downgrades, stock price collapse, or in the worst case, debt restructuring.
π Debt situation in October 2025:
Total debt: $105β111 billion USD
Long-term debt: $82.2 billion USD
Debt-to-Equity ratio: 4.36
Cash reserves: $11 billion USD
Net cash flow: $0.33 billion USD (down -52% year-over-year)
Free cash flow: negative
Oracle is still an excellent company, but at this moment the risk level is too high for my investment strategy, so I decided to exit the position and monitor developments from the sidelines. I just closed my Oracle Corporation position at a profit of 116.32% $ORCL (Oracle Corporation)... Show More
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Sun Feb 08 2026 04:45:34 GMT+0000 (Coordinated Universal Time)
