Oracle Downgraded Over AI CapEx
mkheck · x · 2026-07-11
S&P downgraded Oracle's long-term issuer credit rating from BBB to BBB- due to rapidly expanding capital expenditures.
Reports indicate the rating agency expects Oracle's CapEx for fiscal year 2027 to reach $90 billion to $95 billion, up from the previous $60 billion forecast, primarily driven by AI chip costs and new data center construction. The post further notes that data center costs continue to rise with every Nvidia chip upgrade, not even accounting for the simultaneous increases in memory, storage, turbines, and cooling. Future scenarios might include project cancellations, downsizing, or even the sale of abandoned assets.
Related event: S&P Downgrades Oracle to BBB- Citing AI CapEx(3 posts)→
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