Oracle (ORCL) stock fell 8.8% on Wednesday, October 14, closing at $130.55, after a hotter-than-expected September inflation report revived bets on Fed rate hikes and sank AI stocks across the board.
Oracle took one of the hardest hits among the big AI names. Its heavy debt load leaves it exposed to higher financing costs, although it is also funding the buildout with equity and customer prepayments.
What Spooked Investors
- September CPI rose 3.7% year over year (up from 3.4% in August), pushing Treasury yields higher.
- A CoreWeave bond yield neared 15% the same day, reviving fears about debt-funded AI capacity.
- Nothing changed at Oracle itself (fiscal 2027 guidance of at least $90 billion in revenue still stands).
Oracle’s Interest Bill Is Growing Faster Than Adjusted Operating Profit
Oracle’s total debt, including leases, reached $167 billion at the end of fiscal 2026 in May, up from $109 billion a year earlier.
Interest expense followed. It hit $1.43 billion in the August quarter, up 55% from a year earlier, while non-GAAP operating income grew 31%. Over the last four quarters, interest expense equaled about 17% of non-GAAP operating income (about 22% on a GAAP basis). With $90 billion to $95 billion of capex planned this fiscal year, Oracle will need more outside funding, and higher rates make any new debt costlier.
Rates now reach Oracle’s earnings directly.
The Read on Nvidia and CoreWeave
Nvidia (NVDA) fell 3.2% amid the broader selloff in AI and semiconductor stocks. CoreWeave (CRWV) dropped 15.5%, the starkest version of the same debt worry.
What Oracle Stock Is Worth After the Drop
I treated Wednesday’s fear as a slower ramp rather than a broken story. I have revenue growing about 26% a year through fiscal 2032 and net margin slipping to about 25% from 30% as lower-margin cloud and heavier interest pile up, with the multiple shrinking a little each year.
That still puts Oracle at about $351 by May 2031: a 169% total return, or roughly 24% a year. Even my low case, $318, more than doubles the stock. Rates decide how bumpy the road gets.
Think my assumptions are too generous, or too cautious? Build your own Oracle model on TIKR in about 60 seconds, free, starting from consensus estimates. Learn more here.
So what is Oracle stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what ORCL stock could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Value Oracle Corporation for free→
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
