Oracle's stock plummeted 5.11% during intraday trading on Monday, as investors reacted to heightened credit risk concerns and massive capital expenditure forecasts for artificial intelligence infrastructure.

S&P Global Ratings downgraded Oracle's long-term issuer credit rating from "BBB" to "BBB-", the lowest investment-grade level, citing two primary risks. First, the company's AI capital expenditure is projected to surge to $90-95 billion for fiscal 2027, creating a projected free operating cash flow deficit of approximately $42 billion. Second, Oracle faces extreme customer concentration, with OpenAI accounting for nearly half of its contractual obligations, exposing the company to severe financial impact if OpenAI encounters distress.

The downgrade compounds broader market worries about the sustainability of AI infrastructure spending, with six major tech hyperscalers having issued approximately $244 billion in bonds this year. Additionally, the White House's initiative to rally utilities and data centers for an AI power cost pledge could shift billions in power costs to technology companies including Oracle, potentially increasing operational expenses.