Oracle Corporation reported strong second-quarter fiscal 2026 earnings after the market closed on Dec. 10, driven by heavy demand for AI-related services. Yet the company’s stock tumbled as investors increasingly weighed the risks of its rapid, debt-financed expansion to meet AI-driven capacity needs.
The surge in spending on AI infrastructure has created a broader dilemma for markets: weighing the promise of high future payoffs against the risk that these investments may fail to deliver them, especially for firms that rely heavily on borrowing.
Until recently, investors appeared unconcerned, bidding up shares of nearly any company announcing major plans to build data centers, expand cloud capacity, develop computing hardware and software, or increase the power infrastructure needed to support these systems….