Tech companies’ AI debt surges as Oracle nears junk credit rating
Wall Street is starting to ask an uncomfortable question about the AI boom: what happens when the spending outruns the cash? Big tech companies AI debt loads are climbing fast, and two of the industry’s most aggressive spenders, Oracle and Meta, are now facing real scrutiny from credit markets over how they plan to pay for it all.
Key takeaways
- Oracle’s fiscal 2026 capital expenditure hit $55.66 billion, blowing past its own $50 billion target.
- Oracle is projecting up to $95 billion in capex for fiscal 2027, funded largely through debt and equity.
- S&P Global cut Oracle’s credit rating to BBB- in July 2026, one notch above junk, as its 5-year credit default swaps hit multi-year highs.
- Meta issued $30 billion in bonds in October 2025, its biggest debt sale of the year, and is separately financing a $12 billion Texas data center.
- Credit spreads on bonds from Meta, Alphabet and Amazon are widening as investors demand higher returns for the added risk.
Oracle’s Surging Capital Expenditures and Credit Challenges
Oracle spent far more than it planned to build out AI infrastructure last year, and its 2027 outlook suggests that pace isn’t slowing down. The company’s fiscal 2026 capital expenditure reached $55.66 billion, overshooting its own $50 billion target by a wide margin. That overshoot alone would raise eyebrows, but Oracle is now guiding toward a fiscal 2027 capex figure of up to $95 billion, a number that includes customer repayments and represents roughly a 70% jump year over year.
… Continue reading the full article at the original source below.
