Oracle Earnings Spur Risk-Off Sentiment Despite Fed Rate Cut
Risk assets fell Thursday as weak earnings from Oracle compounded pressure on markets, despite the Federal Reserve’s recent rate cut.
Bitcoin (BTC) traded near $90,000, down 2.8% over 24 hours, while Nasdaq futures, tracking the tech-heavy U.S. index, slipped 0.8%, reflecting renewed caution in AI-focused sectors.
Oracle reported fiscal Q2 2026 results for the period ending Nov. 30, 2025. Total revenue slightly missed expectations, dragged down by declining legacy software sales and weak new license bookings.
The results highlight the growing gap between debt-fueled AI infrastructure investments and the slower-than-expected revenue hitting company coffers. The Financial Times noted a $15 billion increase in planned data center spending and a 25% rise in long-term debt to $99.6 billion. Cloud infrastructure revenue came in at $4.1 billion, below analyst forecasts, and Morgan Stanley projects Oracle’s net debt could reach $290 billion by 2028.
After-hours, Oracle shares fell more than 10%, weighing on AI-related equities and crypto markets. The selloff also drew attention to Oracle’s five-year credit default swaps (CDS), which surged to their highest level since 2022.
The Special Situations newsletter said, “117 bps represents a material repricing of risk but does not indicate distress,” implying a 1.93% annual probability of default and a 9% cumulative five-year risk.
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