Concerns over excessive capital expenditure on artificial intelligence (AI) and debt pressures have triggered a sharp market correction for the shares of U.S. tech giant Oracle (ORCL), leading to a significant reduction in the personal fortune of its founder and chairman, Larry Ellison, and a notable drop in his global billionaire ranking.
As of the close on the 13th Eastern Time, Oracle shares fell over 5%, dropping below $133 per share. Since hitting a record intraday high of $250 on June 1st this year, the stock has plunged approximately 47% over the past month, reducing the company's market capitalization from a September peak of $877.1 billion to about $383 billion currently. This decline wiped $8 billion from Ellison's net worth in a single day, as he holds roughly a 40% stake in Oracle. His fortune now stands at $175.2 billion, causing his rank on the global rich list to fall from second place in early June (behind only Elon Musk) to eighth, now trailing Nvidia founder Jensen Huang.
Analysts point out that the primary driver of investor anxiety is Oracle's aggressive recent expansion plans in AI infrastructure. Although the company's quarterly results in early June exceeded revenue and profit expectations, its massive capital expenditure program has weighed on market sentiment. Oracle confirmed plans to spend approximately $70 to $95 billion on data center construction in the current fiscal year. The scale of this investment is projected to create a free cash flow shortfall of $23.7 billion for fiscal year 2026, with plans to raise an additional $40 billion through debt and equity financing in fiscal year 2027.
Oracle's capital-intensive development model has raised red flags among rating agencies and industry analysts. S&P Global downgraded Oracle's credit rating to BBB- last Thursday, noting that while its rapidly expanding AI infrastructure business has promise, the costs are excessively high and customer concentration is a significant risk. S&P specifically highlighted that startup OpenAI accounts for about half of Oracle's remaining performance obligations (RPO). Should OpenAI encounter financing or payment difficulties, Oracle would face severe financial risk from being unable to exit massive data center leases. Melius Research also noted in a report that if leading AI firms like OpenAI or Anthropic reduce their computing power demands, Oracle's ambitious spending plans could become unsustainable.
Amid broader pressure on tech stocks and geopolitical risks, the U.S. stock market showed weakness that day. Beyond Oracle, the personal wealth of Tesla and SpaceX founder Elon Musk also shrank by $45.7 billion in a single day, falling to $871.6 billion.