Risk assets are facing pressure on Thursday, even after the Fed’s rate cut, exacerbated by Oracle’s disappointing earnings alongside the central bank’s hawkish outlook.
Bitcoin , the top cryptocurrency by market cap, is trading around $90,000, showing a 2.8% decline over the last 24 hours, based on CoinDesk data. Futures linked to the tech-heavy Nasdaq are down 0.80%.
Late on Wednesday, Oracle released its fiscal Q2 2026 earnings report, covering the period ending November 30, 2025. Total revenue slightly fell short of expectations, with legacy software revenue declining and new license sales particularly weak.
This situation underscores the disparity between the debt-driven AI infrastructure spending surge, the anticipated earnings, and the actual delayed cash flows impacting finances.
The Financial Times reported that Oracle’s earnings were overshadowed by a $15 billion increase in planned data center expenses and unmet revenue expectations, while its long-term debt has risen to $99.6 billion, a 25% increase from last year. Cloud infrastructure revenue reached $4.1 billion, below projections, further relying on debt expansion.
The report cited Morgan Stanley’s prediction of Oracle’s net debt soaring to around $290 billion by 2028.
Oracle’s shares dropped over 10% in after-hours trading, weighing down AI stocks and providing bearish signals to the crypto market. The price decline renewed social media scrutiny over Oracle’s five-year credit default swap, a type of insurance contract that indicates default risk.
This rate has surged to its highest level since 2022, reflecting a substantial repricing of risk, according to the Special Situations newsletter.
“Historically, ORCL CDS traded around 20–40 bps, so 117 bps signifies a significant repricing of risk, but does not signify a distressed status,” the newsletter noted on X.
“The Oracle 5Y CDS graph appears intriguing $ORCL until one analyzes the math and realizes it only factors in a 1.93% annual default probability and a 9% cumulative default probability over five years,” it added.
