“The Real Reason Oracle Stock Is Crashing”
ORCL faces a downward spiral from rising debt costs and negative free cash flow; avoid investing.
When Oracle signed a $300 billion deal with OpenAI, the stock skyrocketed and investors were really bullish on the company's future as an infrastructure play in artificial intelligence.
But it's been nothing but downhill for the company since then. Shares are down over 50% over the past year. And there's a huge problem that is rearing its head for Oracle and really all of the Neoclouds out there.
As the industry has burned through all of its free cash flow, it's now relying on debt to fund the AI buildout. And that debt is getting more and more expensive.