Oracle Corp. shares declined more than 3% on Thursday as investors awaited the software and cloud computing company’s quarterly earnings report, with the market closely watching its artificial intelligence infrastructure spending, debt levels and cash-flow outlook. The company’s results are expected after the US market closes.
At 12:28 pm EDT, Oracle shares were down 3.44%, or $5.69, at $155.94. Although the stock has recovered about 36% from its July low, it remains down 19% so far in 2026. Oracle is heading towards its weakest annual stock-market performance since 2008 after losing more than half its value from the record high reached a year ago.
Investor concerns have centred on the company’s aggressive spending to build cloud-computing capacity for artificial intelligence workloads. Oracle is expected to invest heavily in data centres, servers, networking equipment and other infrastructure as it seeks to meet growing demand from large AI customers.
The company’s financial position has become a major point of discussion in the market. Oracle’s capital expenditure rose sharply to $55.7 billion in fiscal 2026, compared with $21.2 billion in fiscal 2025. The spending surge resulted in negative free cash flow of $23.7 billion during the last financial year.finance.
Credit-rating agency S&P Global Ratings downgraded Oracle’s long-term credit rating to BBB- in July, the lowest level within the investment-grade category. The downgrade reflected concerns about rising AI-related spending and the company’s ability to generate positive cash flow while funding its expansion. Oracle’s five-year credit-default-swap spread, which reflects the market cost of insuring its debt against default, also climbed to a record high during the year.
Despite the balance-sheet concerns, Wall Street expects Oracle to report strong operational growth for the fiscal first quarter ended August 31. Analysts estimate that earnings per share may rise by about 30% from a year earlier, while quarterly revenue is also expected to increase at a similar pace.
Cloud infrastructure revenue is projected at around $7.2 billion for the quarter, more than double the $3.3 billion reported in the comparable period a year ago. The growth rate will be closely watched because cloud services have become central to Oracle’s push into the AI infrastructure market.
However, the investment required to sustain such growth remains substantial. Oracle’s capital expenditure is expected to approach $20 billion in the latest quarter, while free cash flow may turn negative by around $10 billion, based on Bloomberg consensus estimates.
Capital spending could rise to nearly $93 billion in fiscal 2027, followed by more than $104 billion in fiscal 2028, before easing to around $95 billion in fiscal 2029. Free cash flow is projected to fall to negative $46.6 billion in fiscal 2027.
The earnings report will be crucial in determining whether Oracle’s cloud growth can reassure investors that its large AI infrastructure investments will eventually generate adequate returns and improve cash flow.