Oracle Earnings Drag Risk Assets Lower Despite Fed Rate Cut
Risk assets slipped Thursday as disappointing Oracle earnings compounded pressure, even after the Federal Reserve’s recent rate cut.
Bitcoin (BTC) hovered near $90,000, down 2.8% over 24 hours, while Nasdaq futures, tracking the tech-heavy index, fell 0.8%, reflecting cautious sentiment in markets exposed to AI hype.
Oracle reported fiscal Q2 2026 results for the period ending Nov. 30, 2025. Total revenue slightly missed expectations, hurt by weaker legacy software sales and underwhelming new license bookings.
The results underscore a widening gap between heavy, debt-driven AI infrastructure spending and slower-than-anticipated revenue inflows. The Financial Times highlighted a $15 billion planned increase in 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 forecasts, and Morgan Stanley projects net debt could hit $290 billion by 2028.
After-hours, Oracle shares dropped over 10%, pulling down AI-related stocks and weighing on crypto markets. Attention also returned to Oracle’s five-year credit default swaps (CDS), which surged to their highest level since 2022.
According to the Special Situations newsletter, “117 bps represents a material repricing of risk but does not indicate distress,” translating to roughly a 1.93% annual default probability and 9% cumulative five-year risk.
