Oracle’s corporate bonds have weakened following reports that the company plans to assume $38 billion in additional debt to accelerate its AI and cloud infrastructure expansion. The company has already invested heavily in data center build-outs and GPU capacity, aiming to secure long-term contracts with major AI firms, including OpenAI.
Oracle currently carries about $104 billion in total debt, with $18 billion in outstanding bonds. The scale of its capital spending now exceeds operating cash flow, a dynamic analysts say reflects a broader trend among large tech firms balancing aggressive capex with stock buyback commitments. According to Morgan Stanley Wealth Management, some companies are turning to debt markets to maintain both initiatives simultaneously.
Investor caution has emerged in recent trading. Prices for Oracle’s 2033 bonds with a 4.9% coupon have fallen, pushing yields up more than three basis points over two weeks. Its 2032 bonds with a 4.8% coupon have also seen yields rise by nearly two basis points in one week. Analysts note increased selling pressure and ongoing questions about the company’s ability to generate returns from such large-scale AI infrastructure investments.
