Oracle just posted its worst quarterly stock performance in nearly a quarter century, and the culprit isn’t a product failure or a lost contract. It’s the sheer volume of money the company is pouring into artificial intelligence infrastructure, with no clear timeline for when those bets will pay off.

The stock dropped approximately 30% in Q4 2025, the steepest quarterly decline since Q3 2001, when it fell nearly 34%. For context, that earlier plunge happened during the dot-com implosion.

The earnings report that broke the dam

On June 10, Oracle released its fiscal Q4 results. Revenue actually beat estimates. Instead, the stock cratered 8.9% after the bell.

The reason: capital expenditures came in at levels that made investors visibly uncomfortable. Oracle spent $55.66 billion on capex across fiscal 2026, overshooting its own $50 billion target by more than 11%. That’s not a rounding error. That’s an extra $5.66 billion that management apparently decided to spend beyond what it had already telegraphed to the market.

Oracle has projected an estimated $95 billion in capital expenditures for fiscal 2027. To fund that appetite, the company plans to raise nearly $40 billion through a combination of debt and equity.

The stock has now dropped over 50% from its all-time high set in September 2025, erasing hundreds of billions of dollars in market capitalization.

The AI capex trap

Oracle has maintained a strong collaboration with OpenAI and has been positioning itself as a critical infrastructure provider for the AI boom.

The planned $40 billion raise through debt and equity in fiscal 2027 adds another layer of risk. Debt increases interest expenses and financial fragility. Equity raises dilute existing shareholders.

At its September 2025 peak, the stock was priced for a future where AI investments would translate smoothly into outsized revenue growth and margin expansion. The market is now repricing that assumption, and the correction has been brutal.