Oracle is inching closer to "junk" territory.

S&P Global Ratings announced Thursday that it was downgrading the credit ratings of the software and AI cloud computing giant from BBB to BBB-, one notch above speculative grade, or junk-bond, ratings.

Oracle's "growing AI infrastructure business is diluting its strong business risk profile," S&P analysts wrote. They added that they had previously "underestimated the scale of the investments required to expand the AI business and its impact on our overall view of Oracle's creditworthiness."

The extra yield, or spread, that investors are demanding to hold Oracle's 5.7% bonds due in 2036 was recently 1.84 percentage points, according to MarketAxess, up from 1.75 percentage points Wednesday.

Oracle shares were up 2.7% on the day to $144.22, though the price slipped from about $146 in afternoon trading following the downgrade.