Oracle shares tumbled 5.04% in intraday trading on Thursday, as reports emerged that the company may sell a part of its stake in Indian subsidiary Oracle Financial Services to raise cash. The move is seen as a response to intensifying financial strain and deteriorating credit metrics.

Multiple headwinds are weighing on the stock. Oracle’s five-year credit default swaps have surged to around 203 basis points, the highest in nearly 18 years, while S&P Global Ratings recently downgraded the company to BBB-, one notch above junk status. The rating action cited concerns over returns on massive AI capital expenditures and heavy reliance on OpenAI contracts. Cost overruns are adding to the pressure, including a Wisconsin data center project requiring over $7 billion in collateral guarantees and a New Mexico facility where expenses have ballooned by billions due to environmental compliance changes.

The potential divestiture of the Indian unit stake, as reported by CNBC-TV18, signals Oracle’s need to shore up liquidity. With credit spreads widening sharply and a broader tech sell-off underway, investor confidence in Oracle’s aggressive AI infrastructure buildout remains fragile.