Oracle shares fell nearly 7% to $134.605 in Thursday morning trading as investors weighed the cost of financing the company's AI buildout. Reuters reported that AI-related issuers' bonds traded about 115 basis points above benchmarks, versus 78 basis points for the broader investment grade market, a 37 basis point gap that reflects a market average rather than Oracle's own borrowing rate. Oracle separately reported $11.6 billion in quarterly cloud revenue, up 62%, underscoring demand that still requires heavy cash outlays to serve. At $134.605, the stock trades 30.07% below the $192.48 GF Value cited by GuruFocus, leaving investors to question whether Oracle can convert cloud contracts into cash fast enough to fund the buildout without making financing more expensive.
Oracle CorporationAI-related debt spreads widened, raising Oracle's financing costs for its AI buildout and pressuring shares.
