"It all started so well in September. Despite lackluster profit and revenue figures, Oracle's shares climbed 30 percent when its first quarter results for FY2026 revealed its remaining performance obligations (RPOs) were stuffed with the promise of $455 billion, largely for its cloud infrastructure, briefly allowing co-founder and CTO Larry Ellison to claim the crown of the world's richest person."
"As Thanksgiving nears, financial traders have piled into Oracle's credit-default swaps, in which the buyer gets some insurance against a debt default. The price of the financial instruments insuring against defaults for five years has tripled for Oracle in recent months, an indication of a perceived increase in risk. Meanwhile, investors have flooded into the market, trading more than $5 billion (£3.8bn) in Oracle CDS since September, according to Jigar Patel, a Barclays analyst."
Oracle reported $455 billion in remaining performance obligations, largely tied to cloud infrastructure, which drove a 30% stock surge and briefly elevated Larry Ellison's net worth. Credit-default swap prices for five-year protection have roughly tripled, and over $5 billion in Oracle CDS traded since September, signaling heightened perceived default risk. Capital spending on datacenters for AI is set to rise to $35 billion in fiscal 2026 from $21 billion in fiscal 2025. Oracle announced a $300 billion cloud compute contract with OpenAI, has raised $18 billion in bonds, may need substantial additional borrowing, and faces a Moody's overhang tied to counterparty risk.
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