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Barchart
Barchart
Yiannis Zourmpanos

Bondholders Are Suing Oracle for Its AI Losses. Is There a Case to Keep Buying ORCL Stock and Waiting for AI to Pay Off?

Oracle (ORCL) stock declined nearly 5% this past week after a group of bondholders reportedly filed a lawsuit over losses incurred because of the company's investments in artificial intelligence (AI). The suit is a proposed class-action lawsuit filed in a New York state court and represents investors who bought approximately $18 billion of the company's debt offered in September.

This legal matter has reignited concerns about Oracle’s balance sheet among investors, and it comes at a time when Oracle is increasing its expenses for developing AI cloud data centers. Oracle has turned out to be one of the most crucial infrastructure players in the AI industry, which has sparked hopes about its long-term growth. However, this has also meant high expenses for Oracle’s debt investors.

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