Source Post

Oracle's MASSIVE Debt Problem

Asymmetric Investing by Travis Hoium

Jun 16, 2026

Oracle's stock experienced a nearly 10% drop following its earnings report and announcement of a $40 billion capital raise, with $20 billion from stock sales and $20 billion from debt. The company's substantial existing debt of $120 billion, coupled with exploding capital expenditures for AI infrastructure and a current lack of ROI on these investments, has created a highly leveraged situation. While revenue growth is strong, the significant spending has led to a free cash flow burn, raising concerns about the long-term viability and risk for investors.