Oracle shares closed at their lowest point in more than a year on Thursday, capping a prolonged slide that has now erased nearly two-thirds of the company’s peak value as concerns mount over the cost and risk profile of its artificial intelligence ambitions.
The stock closed at $124.21, a drop of 6.25 percent on the day and the weakest closing price since late April 2025. At the peak of its recent run, Oracle shares had touched approximately $345 in early September of last year. The decline from that high now stands at nearly 64 percent, a staggering reversal for a company that had become one of the more prominent beneficiaries of the AI investment wave that swept through markets in 2024 and early 2025.
The selloff has accelerated in recent days. Oracle shares fell on four of the five trading sessions following July 9, a stretch that coincided with a credit rating downgrade that sharpened investor concerns about the company’s financial trajectory.
A credit warning sets off alarm bells
The downgrade came from S&P Global, which revised its assessment of Oracle’s creditworthiness from BBB to BBB minus, placing the company at the lowest rung of investment-grade territory. The ratings agency pointed directly at Oracle’s AI infrastructure buildout as the source of the elevated concern.
The firm warned that the company’s expanding AI operations required substantial capital commitments upfront, including long-term data center leases and significant hardware outlays, and that those costs had been consistently larger than anticipated. Rising component prices added another layer of pressure on the business model underpinning the company’s AI push.
The downgrade crystallized a tension that has been building across the technology sector for months. Companies racing to build out AI capacity have committed to enormous spending programs, and investors who initially cheered those plans have grown increasingly attentive to the question of when and whether those investments will generate commensurate returns.
A broader selloff hits chips
Thursday’s drop did not happen in isolation. Oracle’s decline was part of a broader pullback in semiconductor and technology stocks that weighed on markets across the board. The Philadelphia Semiconductor Index, which tracks companies engaged in the design, manufacture and sale of chips, fell more than 4.2 percent on the same day.
The chip sector has taken on an outsized role in shaping the daily direction of major U.S. stock indexes in recent months, as the fortunes of semiconductor companies have become tightly linked to investor sentiment around artificial intelligence. When confidence in the AI trade softens, chips tend to lead the declines, and the broader market often follows.
Its exposure to that dynamic is both a product of its ambitions and a vulnerability. The company has positioned itself aggressively as a cloud and AI infrastructure provider, making commitments that require sustained capital expenditure over years, not quarters. That positioning made it a Wall Street darling during the AI boom and has made it more exposed as the mood has shifted.
What comes next for Oracle
The path back from a 64 percent decline is not a short one, and the credit downgrade adds a layer of complexity beyond stock price performance. A lower credit rating can affect borrowing costs, making the long-term financing of large infrastructure projects modestly more expensive at precisely the moment when the company is committed to spending at scale.
The company has not signaled any intention to pull back from its AI buildout, and the demand for cloud infrastructure broadly remains robust. But Thursday’s close served as a pointed reminder that enthusiasm for artificial intelligence investments has limits, and that the market is paying closer attention to the balance sheets behind the ambition than it was a year ago.
