Risk assets are under pressure Thursday despite the Fed’s rate cut, with Oracle’s earnings miss piling up alongside the central bank’s hawkish guidance.
Bitcoin the leading cryptocurrency by market cap, is trading near $90,000, representing a 2.8% drop over 24 hours, according to CoinDesk data. Futures linked to Wall Street’s tech heavy index, Nasdaq, have fallen 0.80 per cent.
Late Wednesday, Oracle released its earnings for the second quarter of 2026 (Q2 FY26), covering the period ending Nov. 30, 2025. Total revenue came in slightly below consensus, with legacy software revenue down and new license sales particularly weak.
This has once again highlighted the gap between the debt-driven AI infrastructure spend, the promised revenues and the reality of delayed cash flows hitting the coffers.
The Financial Times reported that Oracle’s earnings were overshadowed by a $15 billion jump in planned data center spending and a loss of revenue, while its long-term debt rose to $99.6 billion, a 25% jump from a year ago. Cloud infrastructure revenue came in at $4.1 billion, below expectations, and was further dependent on debt expansion.
The report cited Morgan Stanley as forecasting an increase in Oracle’s net debt to about $290 billion by 2028.
Shares of Oracle fell over 10% after market hours, dragging down AI shares and sending bearish signals to the crypto market. The staggering award renewed social media focus on Oracle’s five-year credit default, a type of insurance contract that reflects perceived default risk.
It has jumped to the highest since 2022. The increase reflects the material repricing of risk, according to the Special Situations newsletter.
“Historically, ORCL CDS traded around 20-40bps, so 117bps represents a significant repricing of risk, but not a distressed profile,” the newsletter service on X said.
“The Oracle 5Y CDS graph looks exciting $ORCL until you run the math and realize it’s only pricing in a 1.93% probability of default per year and a 9% 5-year cumulative probability of default,” it added.
