Oracle shares fell more than 2% on Monday, pressured by a combination of broad market headwinds and company-specific concerns. Rising oil prices and elevated Treasury yields weighed on equities generally, while investors also focused on Oracle's aggressive spending on AI infrastructure and signs of strain in credit markets tied to its data center projects.
The stock was already under pressure after Alphabet's cybersecurity unit, Mandiant, reported a fresh wave of attacks exploiting a vulnerability in Oracle's PeopleSoft software. According to Reuters, the hacking group ShinyHunters resumed what Mandiant described as "mass exploitation" of the flaw, targeting organizations that had deployed web application firewall rules but had not yet installed Oracle's security update.
Mandiant said the campaign affected dozens of systems globally across higher education, technology, healthcare, agriculture, transportation, and government sectors. An earlier round of attacks between May 27 and June 9 primarily hit universities and occurred before Oracle issued a security advisory on June 10, when no patch was available. The latest activity followed claims by ShinyHunters that it had stolen FBI personnel data through a PeopleSoft vulnerability. Reuters said it could not verify the claim, and the FBI said it was "aggressively investigating" the reported breach.
Project Jupiter credit stress adds to investor worries
Separately, credit markets are showing signs of stress around loans linked to Oracle's Project Jupiter data centers in New Mexico. The debt has traded at stressed levels following an S&P downgrade that left the credit just above junk status. The weakness comes as Oracle carries significant debt while committing heavily to AI infrastructure.
Oracle's contracted future revenue has reached $664 billion, but its debt is about 4.3 times EBITDA, compared with less than one times for Amazon, Meta, Microsoft, and Alphabet. The company has also received $11.4 billion in customer prepayments with what its 10-Q describes as a significant financing component. Michael Burry has argued that the accounting treatment of those payments could inflate reported future cloud revenue while the associated financing costs are recorded as interest expense. He has warned that large AI infrastructure commitments could lead to significant write-offs in 2028 or 2029 if the assets fail to generate expected returns.
Ellison pledges more shares as WBD deal advances
Investors are also watching the personal financial commitments of executive chairman and CTO Larry Ellison. An Oracle proxy filing disclosed that Ellison had pledged 67 million additional Oracle shares as collateral for personal loans compared with a year earlier, a 19% increase from 2025. Based on Oracle's $137.10 closing price on Friday, those pledged shares were worth about $9.2 billion and represented roughly 36% of Ellison's total holdings.
Oracle generally prohibits officers and directors from pledging company shares as collateral for personal loans, with Ellison the sole exception. The pledges come as Ellison has helped finance Paramount Skydance's planned $111 billion acquisition of Warner Bros. Discovery. The Ellison family has committed $47 billion in equity funding for the transaction, with about $24 billion coming from three Middle Eastern sovereign wealth funds. Paramount Skydance, led by Ellison's son David Ellison, has moved closer to completing the deal after settling litigation with 12 state attorneys general and the Writers Guild of America that sought to block it.
Oracle defends long-term AI investment case
Oracle's AI expansion is central to its effort to become a major provider of computing infrastructure for AI workloads. Burry has questioned whether the economics of these investments could eventually lead to large write-offs, pointing to Oracle's debt levels, customer prepayments, and substantial AI commitments as factors investors should monitor.
Oracle has offered a different view of the useful life of its AI infrastructure. Co-CEO Clay Magouyrk said GPUs renewed or resold during the latest quarter generated a 20% premium despite most being four years old or older. He said Oracle sees "a long useful life with increasing value."
This article is for informational purposes only and does not constitute financial advice.
