In the final week of June 2026, Oracle investors faced a collapse not seen in 25 years.
At the close on June 26, Oracle traded at $148.53, falling another 2.58% that day and marking five consecutive sessions of losses. The weekly drop totaled 19.4%, the worst single-week performance since a 23.30% plunge in early March 2001. Compared to its historic high of nearly $900 billion in market capitalization in September 2025, Oracle’s share price has retreated by about 55%.
This isn’t just a routine earnings miss. The market is fundamentally repricing the "spend first, monetize later" business model that has dominated AI infrastructure over the past two years. Oracle’s crash is merely the first domino to fall in the broader AI infrastructure debt chain.
$130 Billion in Debt and $56 Billion in Capex: Oracle’s Balance Sheet Under Pressure
Oracle’s financials reveal the root of market anxiety.
As of the end of May 2026, Oracle’s total liabilities stood at roughly $130 billion. Capital expenditures (Capex) for fiscal year 2026 reached $55.66 billion, up 162% from the previous year. However, free cash flow was negative $23.7 billion—despite a record $32 billion in operating cash flow, nearly all of it was consumed by data center construction.
To fill the funding gap, Oracle raised $43 billion in debt and $5 billion in equity during fiscal 2026. Management has signaled that another $40 billion will need to be raised in fiscal 2027, including a previously announced $20 billion stock offering.
Credit Default Swap (CDS) costs have soared to historic highs, as bond investors demand greater risk compensation. This is a clear sign—credit markets are translating their doubts about Oracle’s debt sustainability into real pricing.
Meanwhile, Oracle cut its workforce by 13% in fiscal 2026, reducing global headcount to 141,000. Sales and marketing departments bore the brunt of layoffs. The juxtaposition of aggressive capital spending with large-scale layoffs sends a signal to the market: the pace of AI infrastructure spending has outstripped what organic growth can support.
The "Other Side" of Revenue Growth: The Timing Challenge of $638 Billion in Remaining Performance Obligations
Oracle’s defenders point to a key metric: Remaining Performance Obligations (RPO) have reached $638 billion, up 363% year-over-year. Cloud infrastructure (IaaS) revenue grew 93% year-over-year, total cloud revenue hit $9.9 billion, up 47%. Fourth-quarter total revenue was $19.2 billion, up 21%.
But these numbers are at the heart of the issue.
Of the $638 billion in RPO, about $75 billion comes from customer prepayments or customer-supplied AI hardware. This "revenue" eases Oracle’s short-term financing pressure, but it doesn’t change the fact that RPO is not recognized revenue, nor is it free cash flow.
The market has begun to ask a previously overlooked question: How long is the revenue recognition cycle for these contracts? If AI compute demand slows or customers delay deployment, can these RPOs convert to cash flow as scheduled? Reports that OpenAI’s IPO has been delayed to 2027 further extend the payback period for Oracle’s massive capital investments.
Evercore analysts wrote in a report: "We expect the pace of leverage and equity issuance to remain a central topic for investors, even as demand signals stay strong."
CoreWeave: $15 Billion in Debt and $31–35 Billion in Capex—A High-Stakes Compute Bet
If Oracle’s debt issues raise "too big to fail" concerns, CoreWeave (an AI cloud service provider) is a textbook example of high-leverage growth risk.
CoreWeave’s 2026 capex guidance is $31–35 billion. By the end of Q1, contract RPO stood at $99.4 billion, with about 36% expected to be recognized in the next two years, and 75% within four years.
CoreWeave’s debt load is equally significant. Including lease obligations, it carries about $15 billion in debt—nearly four times its trailing 12-month revenue. So far in 2026, the company has raised over $20 billion in debt and equity. In mid-June, CoreWeave announced plans to issue $3.5 billion in senior notes.
CoreWeave’s credit rating is speculative grade. Its revenue is heavily concentrated in OpenAI-related compute workloads, most routed through Microsoft. This creates a fragile value chain: if OpenAI’s compute demand falls short or Microsoft changes its partnership, CoreWeave’s revenue base is directly at risk.
Global banks are beginning to feel "overwhelmed" by data center-related loans. Major lenders like JPMorgan, Morgan Stanley, and Sumitomo Mitsui Banking Corporation are actively seeking to distribute these risks to a broader investor base. A $38 billion construction debt tied to Oracle’s Texas and Wisconsin data center projects has taken banks over six months to syndicate, with some institutions even seeking to sell at a discount.
Bank caution is warranted. AI data centers have long construction cycles, high capital intensity, and highly specialized assets—if AI clients don’t lease them, there’s little alternative use. When the world’s largest banks start saying "no" to a particular asset class, it often signals that systemic risk has reached a critical point.
SoftBank: $40 Billion Bridge Debt and the OpenAI Equity Collateral Dilemma
The third link in the triangular debt chain is SoftBank.
To support its OpenAI investment, SoftBank tapped $40 billion in bridge financing, due by March 2027. At the same time, SoftBank is trying to use OpenAI equity as collateral for at least $6 billion in margin loans—an effort that has stalled.
The root of the problem: OpenAI remains a private asset, making it impossible for lenders to value the equity in real time. SoftBank initially sought a $10 billion loan, but reduced the request by 40% to $6 billion as lender enthusiasm waned—yet even this deal has not closed. News of the failed loan sent SoftBank’s stock tumbling more than 8% in a single day.
S&P Global Ratings has revised SoftBank’s credit outlook to negative due to its massive OpenAI investment.
SoftBank faces a classic "maturity mismatch" dilemma: the monetization timeline for its long-term asset (OpenAI equity) is uncertain, while the short-term debt ($40 billion bridge loan due March 2027) is on a countdown. If OpenAI’s IPO doesn’t happen before March 2027, SoftBank may have to sell OpenAI equity on the secondary market or seek other refinancing—both options are fraught with uncertainty in today’s market.
The Systemic Spread of the "AI Debt Crisis": From Individual Stocks to the Entire Credit Market
Oracle’s plunge isn’t an isolated event. It’s happening against a broader backdrop.
The Bank for International Settlements (BIS) listed the bursting of the AI bubble as one of three major "risk flashpoints" threatening global economic prosperity in its annual report released June 29, 2026. BIS warned that if AI returns fall short, a sudden contraction in financing could swiftly reverse the current capex boom into a prolonged investment slump.
Credit market signals are equally noteworthy. In June, the risk premium for high-grade US tech bonds rose to 0.79 percentage points, up significantly from 0.74 at the end of May. Tech giants are raising capital at the fastest pace since the dot-com bubble.
JPMorgan now forecasts that total spending related to AI and data centers will reach $5.5 trillion by 2030, with investment-grade bond market financing for data centers expected to hit $2.1 trillion over the next five years. The question is: Who will pay for this debt? As bond investors demand higher spread compensation and banks cut their exposure to data centers due to internal risk limits, the financing costs for AI infrastructure are rising systemically.
Crypto Market Reflection: Early Indicators of Risk Appetite Contraction
The brewing AI infrastructure debt risks are spreading into the crypto market through multiple channels. On June 29, 2026, Bitcoin fell below $60,000, closing at around $59,356. Ethereum weakened in tandem, trading at roughly $1,553.
Both assets are in a deep correction phase, with daily and 4-hour MACD (Moving Average Convergence Divergence) charts showing persistent bearish crossovers below the zero line. Green momentum bars continue to expand, with no signs of a bullish divergence, indicating that downward momentum remains strong.
The transmission mechanism is straightforward. AI infrastructure companies’ debt is largely financed by banks and credit markets, and major crypto market institutional investors overlap heavily with traditional finance. When AI debt risks trigger expectations of systemic credit contraction, the pricing baseline for risk assets rises across the board—crypto assets, as high-beta instruments, are usually the first to feel liquidity tightening.
Solana briefly dropped below $70, while Dogecoin, BNB, and others also fell. This isn’t just a technical correction—it’s a reflection of a global contraction in risk appetite mapped onto the crypto market.
Who’s Next?
Oracle won’t be the last company punished by the market for AI infrastructure debt pressures.
Following the same logic: AI infrastructure companies whose capex growth far outpaces their ability to generate free cash flow—and whose financing relies heavily on debt markets—are likely targets for the next round of sell-offs. CoreWeave’s speculative-grade rating and $15 billion in debt make it a prime candidate. Nebius (an AI cloud platform) has raised its 2026 capex guidance to $20–25 billion. Even the largest cloud providers with stronger balance sheets are facing increased scrutiny—Microsoft’s 2026 capex guidance is about $190 billion, while Alphabet (Google’s parent) has raised its 2026 outlook to $180–190 billion.
The difference lies in financing structure. Oracle and CoreWeave’s AI infrastructure expansion depends more on external debt, while Microsoft, Amazon, and Google have deeper free cash flow and lower financing costs. But even for the latter, when capex reaches hundreds of billions, internal cash flow can’t cover all expenditures.
JPMorgan’s analysis offers a macro framework: Equity isn’t replacing debt—it’s supplementing it. Every round of equity financing is usually accompanied by even larger debt raises. This means that AI infrastructure leverage won’t decline because tech giants sell equity—in fact, it may keep rising.
Conclusion
Oracle’s 19% weekly drop marks the first systematic repricing of the "spend first, monetize later" financing model for AI infrastructure. $130 billion in debt, $56 billion in annual capex, and negative $23.7 billion in free cash flow together paint a clear picture of balance sheet stress.
CoreWeave’s $15 billion in debt and $31–35 billion in capex, along with SoftBank’s $40 billion bridge loan and the OpenAI equity collateral dilemma, reveal the depth and complexity of this debt chain. When global banks start saying "no" to data center loans, when BIS flags the AI bubble as a systemic risk, and when spreads on high-grade tech bonds keep widening—all these signals point in one direction: the "spend big to stake a claim" model for AI infrastructure is entering a debt repayment test phase.
What does the spread of this AI debt crisis mean for the crypto market? Systemic contraction in risk appetite is underway. Bitcoin dropping below $60,000 and Ethereum losing the $1,600 level aren’t just technical adjustments—they reflect global liquidity tightening as it impacts crypto asset pricing.
Oracle’s 19% plunge is just the beginning. The next question: As credit markets tighten, financing costs rise, and the recognition period for RPOs lengthens—which company will be the next domino to fall?
FAQ
Q1: Why did Oracle’s stock plunge 19% last week?
Market concerns center on Oracle’s $130 billion debt load and the uncertain returns on its AI infrastructure investments. Fiscal 2026 capex hit $55.66 billion, free cash flow was negative $23.7 billion, and the company plans to raise another $40 billion in fiscal 2027. Investors are questioning the sustainability of Oracle’s AI infrastructure expansion.
Q2: Where does Oracle’s debt level stand in the industry?
Oracle’s $130 billion in liabilities puts it at a high leverage level among tech companies. Compared to mega-cap cloud providers like Microsoft and Amazon, Oracle lacks similarly robust free cash flow to support its capex. Its CDS costs have reached record highs, reflecting mounting credit market concerns.
Q3: How risky is CoreWeave’s debt?
Including lease obligations, CoreWeave carries about $15 billion in debt—nearly four times its trailing 12-month revenue. Its 2026 capex guidance is $31–35 billion, and its credit rating is speculative grade. Revenue is highly concentrated in OpenAI, most routed through Microsoft, creating significant customer concentration risk.
Q4: What’s the story behind SoftBank’s $40 billion bridge loan?
To support its OpenAI investment, SoftBank tapped $40 billion in bridge financing, due by March 2027. The company tried to use OpenAI equity as collateral for a $6 billion loan, but the deal stalled because OpenAI is a private asset and lenders can’t value it. S&P has revised SoftBank’s credit outlook to negative.
Q5: How will the AI debt crisis impact crypto markets?
AI infrastructure companies’ debt is largely financed by banks and credit markets, which overlap heavily with institutional investors in crypto. When AI debt risks trigger expectations of credit contraction, the pricing baseline for risk assets rises. On June 29, 2026, Bitcoin fell below $60,000 and Ethereum dropped below $1,600, reflecting the contraction in global risk appetite as it plays out in crypto markets.
