TLDR
Oracle stock has dropped nearly 50% from its September 10 all-time high as debt concerns mount
Blue Owl Capital pulled out of Oracle’s $10 billion data center project due to unfavorable debt terms
Oracle shares fell 5.4% Wednesday, dragging down Broadcom, Nvidia, and AMD
Worries continue about potential delays in Oracle’s data center completion for OpenAI
The S&P 500 dropped 1.16% and Nasdaq fell 1.81% on AI stock weakness
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Oracle stock took another hit Wednesday as the company’s debt troubles moved beyond just its share price. The cloud computing giant is now seeing real-world consequences in its data center projects.
Oracle Corporation, ORCL
Asset management firm Blue Owl Capital walked away from a $10 billion data center deal with Oracle. The reason? Unfavorable debt terms, according to the Financial Times.
This isn’t happening in a vacuum. Oracle’s stock has tumbled nearly 50% since hitting its peak on September 10. The company is carrying a lot of debt, and investors are getting nervous.
Blue Owl’s exit adds weight to existing concerns. Bloomberg reported last Friday that Oracle might delay completing data centers for OpenAI. Oracle has pushed back on that report, but the damage is done.
Wednesday’s trading session reflected these worries. Oracle shares dropped 5.4%. The month-to-date losses now sit at more than 11%.
The Ripple Effect Across Tech
The sell-off didn’t stop with Oracle. Related stocks took hits too. Broadcom, Nvidia, and Advanced Micro Devices all fell as Oracle’s troubles spread.
The broader market felt it. The S&P 500 retreated 1.16%. The Dow Jones Industrial Average dropped 0.47%. The Nasdaq Composite posted its worst day in nearly a month, losing 1.81%.
Bank of America’s Take on AI
Here’s where it gets interesting. Despite the pullback, Bank of America believes the AI trade still has legs through 2026.
But they’re not sugarcoating it. The analysts made clear that rising stock prices and bubble formation aren’t mutually exclusive.
“In our view, such progression validates our thesis that a larger AI bubble continues to build,” Bank of America analysts wrote. They’re saying stocks can keep climbing even as bubble risks grow.
The hard part is knowing when to get out. Timing a bubble’s burst has always been nearly impossible. Bank of America acknowledges this challenge directly.
Oracle’s debt situation is creating real problems beyond stock price movements. The Blue Owl Capital pullout shows that financing partners are getting cautious about the company’s debt load.
