Oracle Slides as the Cost to Insure Its Debt Sets a Record

Oracle shares fell about 4% on Thursday afternoon, trading near $138.56, as the cost of insuring the company’s debt against default climbed to a record and new questions surfaced over how it will finance its artificial-intelligence buildout. The drop extended a long slide. The stock has lost more than a quarter of its value in three months.

The cost of insuring Oracle’s debt hit a record

A credit-default swap is a contract that pays out if a borrower stops repaying, so its price is a live read on how risky lenders think a company has become. The cost of that protection on Oracle’s bonds pushed to a new high this week, according to reporting from Seeking Alpha, as investors weighed the more than $100 billion in debt the company has taken on to build data centers. Morgan Stanley told clients the price of protecting against an Oracle default is approaching levels last seen in the 2008 financial crisis. The comparison is unusual.

A $165 billion project in the New Mexico desert

The sharper catalyst came from Bloomberg, which reported Thursday that Oracle had sent a force-majeure notice tied to Project Jupiter, a planned $165 billion data-center campus in New Mexico. Such a notice can suspend contractual obligations when events outside a company’s control intervene, and the reported trigger was the denial of a key energy permit for the site, which is designed to draw 2.45 gigawatts of power. Oracle has not publicly confirmed the notice. Separately, the Financial Times has reported that roughly $18 billion of loans financing the project are trading at 89 to 91 cents on the dollar, with banks including Santander and Jefferies holding more of the debt than they had planned. The campus is one piece of Stargate, the AI-infrastructure venture Oracle is building alongside OpenAI and SoftBank, and it has drawn local opposition over water and air permits.

A stock down a quarter in three months

The one-day move sits on top of a steep decline. Oracle closed Wednesday at $144.56 and changed hands at $138.56 by early Thursday afternoon. The stock is off about 26% over the past three months and trades far below its 52-week high of $345.72, much closer to the $114.50 low reached during the summer. Trading was heavy. By early afternoon more than 43 million shares had traded, already above the stock’s average pace for a full session over the past month. Oracle’s own plans show the scale of the spending behind the anxiety. In a financing announcement, the company said it intended to raise $45 billion to $50 billion in cash during 2026, split between debt and equity, to expand its cloud business and meet contracted demand from customers including OpenAI and Nvidia.

On the calendar

The close comes first. It will show whether Thursday’s afternoon selling held. From there, the immediate questions are whether Oracle confirms or disputes the Bloomberg report and how the New Mexico permit fight unfolds. Lenders will also study the terms of the bond sale the company has said it will bring to market this year.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.