Why Shares of Oracle Are Getting Crushed This Week

As of the time of writing, Oracle (NYSE: ORCL) stock is down 19.2% over the last five trading days. The move illustrates growing skepticism over the company's investment in artificial intelligence (AI).The bond markets are growing concerned with Oracle's ability to finance its AI investments, and not least its $300 billion data center deal with OpenAI. The AI company is committed to renting servers, while Oracle needs to build out the IT infrastructure and lease the data center "shells." As such, its expenditures are focused on GPUs, networking equipment, and power infrastructure, while taking on leases for the land and buildings. The rise in Oracle's corporate bond yields and the spike in credit default swap (CDS) spreads (a form of insurance against a bond's default), as discussed previously, are signs of stress in the bond markets.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool