Oracle Corp. (ORCL) shares fell 3.3% in premarket trading on Wednesday, setting a nervous tone ahead of its fiscal fourth-quarter earnings report. The decline reflects mounting investor concerns about whether the company’s aggressive artificial intelligence infrastructure expansion can justify its soaring debt and negative free cash flow.
Analysts expect Oracle to report adjusted earnings of $1.96 per share on revenue of $19.1 billion, which would represent roughly 20% sales growth and a 15% earnings increase year-over-year. The central focus remains the Oracle Cloud Infrastructure (OCI) business, projected to grow 92% in the fourth quarter—accelerating from 52% growth a year earlier. A massive remaining performance obligations backlog of $553 billion underscores long-term demand.
However, the AI buildout has strained finances. Capital expenditures hit $50 billion in the first nine months, up from $12.1 billion a year ago. Oracle plans to raise up to $50 billion through bonds and convertible preferred stock, pushing long-term debt above $124 billion. Trailing free cash flow is negative $24.7 billion, and margins are compressing as depreciation expenses climb.
Beyond Oracle, the earnings report carries significant weight for semiconductor stocks. Intel and Oracle have deepened their partnership, with Oracle’s cloud running instances powered by Intel Xeon processors. A strong OCI showing would signal demand for Intel’s server CPUs, potentially lifting INTC shares, which options markets suggest could see short-term gains. AMD is even more directly exposed after Oracle committed to deploying 50,000 of its Instinct MI450 GPUs starting in Q3 2026. The pace of Oracle’s GPU capacity scaling directly impacts AMD’s data center revenue, making the quarterly guidance crucial. Any signs of delays or softening cloud commitments could add pressure to AMD’s stock, although Wall Street maintains a “strong buy” consensus with a $469 price target.
