Oracle Credit Risk Gauge Hits Record 198.23bps
On Friday, a Bloomberg‑sourced credit risk gauge for Oracle Corporation (NYSE: ORCL) climbed to an all‑time high of 198.23 basis points, a rise of roughly ten basis points from the previous close. This level narrowly eclipsed the prior peak of 198.18 basis points recorded on March 27, indicating that market participants are demanding greater compensation for bearing the risk of a potential default on Oracle’s debt.
The surge in the gauge coincided with heightened investor scrutiny of Oracle’s aggressive spending on artificial‑intelligence (AI) infrastructure. The company is pouring capital into new data centres, networking equipment, and advanced chips to support growing demand for AI computing, a strategy that has pushed its free cash flow from operations into negative territory. Analysts expressed concern that the profitability of these AI‑related investments remains uncertain.
Adding to the pressure, S&P Global Ratings downgraded Oracle’s credit rating to BBB‑, the lowest tier within investment‑grade and just one notch above junk status. S&P noted that it had repeatedly underestimated the amount Oracle would need to spend upfront on its AI expansion, leading to the downgrade.
The broader technology sector also faced headwinds after a Chinese startup introduced an AI model that heightened competition concerns for established developers, including OpenAI. This development amplified questions about whether the costly infrastructure outlays by major U.S. tech firms will generate sufficient returns.
Oracle’s position in the corporate bond market remains significant; the firm has approximately $117 billion of bonds included in Bloomberg’s US high‑grade corporate bond index, making it the largest non‑financial corporate borrower represented in that benchmark.
At the time of reporting, Oracle’s shares were up 1.77%. The article was originally published on 18‑07‑2026 at 04:38 am and updated on 19‑07‑2026 at 06:50 pm.