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Oracle’s credit ratings were recently confirmed by big rating agencies. The company is going all in on building artificial intelligence infrastructure. But there are growing worries about rising debt and negative cash flow.
S&P kept Oracle at a BBB rating but gave it a negative outlook. They said Oracle is spending too much too fast. Oracle had earlier planned to spend $25 billion by 2026. Now that number is up to $35 billion, and S&P thinks it could even climb to $38 billion in 2026 and more than $60 billion by 2028.
That kind of spending could make Oracle’s cash flow deficit far worse than the $10 billion expected in 2026. It might also push Oracle’s debt levels very high in 2027 and 2028. S&P adjusted its downgrade limit a little to give Oracle breathing room. They believe investing in AI is better than just buying back shares or making more acquisitions.
Moody’s gave Oracle a Baa2 rating for its new bond offering but also kept a negative outlook. They said Oracle is a leader in enterprise software and cloud, but the debt problem is real. By May 2025, Oracle had over 4 times more debt than its earnings and a cash flow loss of $5.1 billion. Moody’s also warned that Oracle’s massive $300 billion AI contracts could keep debt high and cash flow weak for years.
Fitch was more positive. They rated Oracle BBB with a stable outlook. They believe Oracle’s debt will stay manageable at under 3.5 times earnings. Fitch also pointed out that Oracle has good flexibility, with debt spread out over time and about $11 billion in cash and investments on hand.
All three agencies admitted Oracle has a strong place in the AI infrastructure market. But they also flagged risks. One big risk is that Oracle may rely too much on just a few customers. For example, S&P said OpenAI could bring in over a third of Oracle’s revenue by 2028. Nvidia’s $100 billion investment in OpenAI is seen as a plus for Oracle since it is closely tied to them.
The agencies all agreed that Oracle could get upgraded if it proves its AI strategy works, keeps its debt under control, and returns to positive cash flow.