The Curious Case of Oracle Stock: The Better the Business Gets, the More Investors Worry

Oracle (ORCL) is being punished for the one thing that is supposed to make a company great: too much demand. ORCL stock has been hammered this year, falling roughly 26% as investors continue to grow uneasy about how the company is paying for its huge push into artificial intelligence (AI).

What makes this unusual is that the business itself has never looked stronger. Oracle is sitting on a record pile of future orders, so customers clearly want what the company has to offer. The concern is whether Oracle can actually build what it is offering. To build the data centers behind its AI cloud, Oracle is burning through cash faster than it earns it, and borrowing heavily to cover the rest. Total debt has increased to more than $167 billion, and the firm still plans to raise billions more.