Oracle Stock down 35%, Indicating Serious Capex Problems
Oracle stock is way down after investors worry about capital expenditures and how those affect profits.
Quick overview
- In June 2026, Oracle's stock dropped 35% due to escalating debt and fears of overspending.
- This decline followed a strong May performance, marking Oracle's worst monthly drop since 1990.
- Despite a 21% revenue increase to $19.2 billion, shareholders are concerned about the company's high capital expenditures, which consume 86% of its revenue.
- Oracle's heavy investment in AI infrastructure may secure future growth, but investors are anxious for immediate profit margins.
For the month of June, Oracle (ORCL) dropped 35% as its debt spiraled to $130 billion and investors jumped ship on fears of overspending.
Oracle enjoyed its best month in years during mat 2026 with a nearly 40% stock jump, but June’s performance was much worse. The company’s stock value plummeted nearly 35% but not entirely because of Oracle’s actions.
The database and cloud infrastructure company is suffering on the stock markets just like many other tech businesses in the AI sector. The problem is that capital expenditures are higher than ever- a necessary problem in a growing tech market. However, investors and shareholders are scared. They wonder how much longer the spending will escalate and how soon profits will begin to catch up.
Oracle’s Awful Month
June 2026 marks a milestone for Oracle stock, giving the company its worst drop since 1990. That is especially worrying since the company is coming off its best month since 2000 with a robust May performance. All of that momentum is lost and all of the goodwill from its shareholders has evaporated. Now, they have to work hard to right the ship, but the biggest problem is their capital expenditures, and secondary to that is the climbing debt.
Oracle has to spend money to grow its infrastructure and keep up with customer demand, and the company has to spend billions to stay ahead of its competitors in the AI sector. There is a severe risk that highly competitive AI-sector companies like Oracle will fall behind as the technology advances rapidly.
Oracle is working to protect its future by investing heavily in artificial intelligence tech, but at the same time they are digging a hole that will be difficult to climb out of. As Oracle increases its AI buildout, their profits are struggling to keep up. Yet their revenue for the most recent quarter was up by 21%. That equates to $19.2 billion. Management says the increase is mostly due to rising interest in cloud applications and cloud infrastructure.
Their capital expenditures are growing larger, though, and shareholders are not turning a blind eye. Oracle spent close to 86% of its revenue on growing its AI infrastructure. Their strategy to use income to fortify their future could pay off for them but investors want to see large profit margins now, and Oracle does not have that to offer them. The biggest problem for the company now is that there is no foreseeable end in sight to this spending pattern, so stock may continue to freefall.
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