Oracle is under growing pressure after reporting a drop in fiscal third-quarter earnings while investors scrutinize its rising debt and negative free cash flow.
Analysts expect quarterly revenue to grow about 20% to roughly $17 billion, with earnings per share projected around $1.71. However, concerns about the company’s finances and strategy have pushed Oracle’s stock down about 20% so far in 2026.
The company is also undergoing a major restructuring that could cost up to $1.6 billion, largely tied to layoffs. About $826 million of that amount has already been recorded, with additional costs still expected. Reports suggest thousands of jobs could be cut as Oracle shifts further from traditional enterprise software toward cloud infrastructure to compete with Amazon and Microsoft.
At the same time, Oracle’s borrowing has surged. The company ended its last fiscal year with $92.6 billion in total debt, which rose to $108.1 billion after issuing $18 billion in bonds in September 2025. It has also disclosed about $248 billion in future data center lease obligations tied to its expansion plans.
Oracle’s heavy investment in AI infrastructure is another major factor. Capital spending jumped from $6.9 billion in fiscal 2024 to $21.2 billion in 2025 and could reach $50 billion this year. As a result, the company’s free cash flow turned negative after capital expenditures exceeded operating cash flow.
Founder and chairman Larry Ellison says these investments support Oracle’s three-step AI transformation strategy. The plan includes making Oracle databases available across rival cloud platforms like Amazon Web Services, Google Cloud, and Microsoft Azure, converting company data into AI-readable formats, and building an “AI Lakehouse” that allows businesses to use AI models with their private data.
Ellison argues that while training AI models on public data is already a massive industry, applying AI to private corporate data could become an even larger market—one where Oracle believes it has a significant advantage.