Oracle’s credit default swap (CDS) spread has risen to a record 198.23 basis points, as investors weigh the software company’s heavy data center spending, negative free cash flow, and uncertainty over the profitability of its artificial intelligence (AI) investments.

Data from ICE Data Services showed the cost of insuring Oracle’s debt against default increased by about 10 basis points, surpassing the previous record close of 198.18 basis points in March. S&P Global Ratings also downgraded Oracle to BBB- last week, one notch above junk status.

Oracle has been investing heavily in data centers, while free cash flow from operations has remained negative. Research cited by TIKR said the company plans to spend about US$50 billion on capital expenditures in fiscal 2026, supported by a contracted backlog of US$553 billion.

Oracle also said in February that it expects to raise US$45 billion to US$50 billion in gross cash proceeds during calendar 2026 through a mix of debt and equity financing.

🔗 Source: Bloomberg