Oracle stock sinks as market perceives ‘significant risk’ on debt

Yahoo Finance Video 及 Julie Hyman

December 12, 2025

In this video:

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Oracle (ORCL) stock continues to slide in Thursday’s session after the cloud operator posted fiscal second quarter revenue that fell just shy of Wall Street estimates. Theory Ventures Founder Tomasz Tunguz posits that these AI infrastructure companies could be charging significantly more for their services.

Tunguz comes on Market Catalysts to compare Oracle to the likes of Microsoft (MSFT) and Alphabet (GOOG, GOOGL) and comment on Oracle’s relationship with OpenAI (OPAI.PVT).

To watch more expert insights and analysis on the latest market action, check out more Market Catalysts.

Video Transcript

00:00 Speaker A

Oracle shares under pressure as concerns mount about the company’s AI buildout plans increasingly funded by debt. My next guest says the companies that provide AI tools could actually be charging significantly more for their services as use of these tools drive productivity. Thomas Tunguz of Theory Ventures founder is joining me right now. Tomas, thank you so much for being here. Appreciate it.

00:29 Thomas Tunguz

Uh pleasure’s mine. Thanks for having me on the show.

00:31 Speaker A

Um so, let’s talk I I want to talk first of all a little bit about Oracle and then get into that recent blog post where you talked about how much people could be um spending. Um Oracle didn’t seem to reassure the market about its spending plans. And as somebody who is invest or in a lot of early stage AI companies, you’re in venture capital, you think a lot about these big issues. Um how are you thinking about Oracle’s approach and how how the market is reacting to how it has approached things?

01:06 Thomas Tunguz

Well, Oracle’s been very aggressive, especially for a company of its size and market cap, right? So if you look across the the hyperscalers they’re among the smallest and I’m talking about Amazon and Microsoft. Um the other dynamic here is the, you know, the the total amount of CAPEX as a percentage of cash of Oracle is significantly larger than both Microsoft and Google. And so Oracle is building out a lot of these data centers primarily with debt and they’re spending roughly the same amount of money, order of magnitude, about 100 billion a year, 30 billion in the last quarter on building out these data centers, uh and they are they’re smaller.

01:45 Thomas Tunguz

You also can see within the credit default swaps, which is a measure of the probability that the company will default on debt. Their credit default swaps are trading at three times plus that of Google and Microsoft. So the market is perceiving some significant risk here. We could argue that the market is saying this is a way of betting or at least hedging against a fall within the AI data center build out, or we could say it’s probably more company specific. And in this case it’s probably more company specific primarily because

02:16 Thomas Tunguz

they they came up a little short on some of the numbers yesterday. And there is extra capacity and there’s two different ways of looking at extra capacity. One is the demand is not coming online as quickly as they thought. uh or the other is that they’re actually ahead of their contracts. And the remaining performance obligations which is the uh contracted revenue in the future has surged, but it’s unclear when that revenue is coming. In contrast, Microsoft in the most recent earnings announcement said that the average duration for their RPO is about two years, but we don’t have any visibility into Oracle’s RPO duration.

02:56 Speaker A

Well, and not just say yeah, go ahead, sorry. Go ahead.

03:00 Thomas Tunguz

No, no. all of that to say, I mean, for startups all of this is great, right? As long as there’s more GPUs and ability to drive inference and experiment and people with big balance sheets and ability to borrow can build these data centers. That’s that’s a really good thing. The downside would come when there’s some miss or significant change in the fundraising environment.

03:31 Speaker A

Well, and and something that one of our guests raised earlier about Oracle in particular is its reliance on Open AI, not exclusively, but pretty heavily, and questioning whether whether not just the timing of those of that RPO, the remaining performance obligations, but the whether they will ever come to fruition given the lack of revenue through the door at Open AI. So the fundraising question I guess goes to Open AI as well, you know, whether they’ll be able to fund raise enough to continue to meet those obligations. And from inside that startup ecosystem, what is the kind of perception of that when it comes to Open AI?

04:14 Thomas Tunguz

Yeah, I mean I think Open AI revenue is growing really fast. The projections are quite aggressive in order to hit many of their goals. Uh and so we will I mean, we will see. I think there’s a lot of confidence in an insatiable demand for inference. And we see it inside of our venture capital firm and we’re spending hundreds of thousands of dollars a year on inference and and we don’t expect that to decrease anytime soon because we’re automating so much work. So, I what what the numbers will ultimately be and where Open AI hits, I I don’t know, but um we know that many of the existing data centers and the GPUs that are serving both startups and large companies, uh have sold out all of their capacity for two or three years, which means that here there’s there’s at least plenty of demand so far.

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