Oracle Corp. (NYSE:ORCL) is trying to convert surging AI demand into long-term cloud growth, but heavy infrastructure spending, rising leverage and data center execution risks continue to weigh on the stock.

The stock slipped about 1% Wednesday as investors assessed the cost of its aggressive AI expansion. The stock has fallen almost 30% in 2026 even as cloud revenue and contracted backlog reached record levels.

AI Expansion Drives Heavy Spending

Oracle expects capital spending of $90 billion to $95 billion as it builds multi-gigawatt computing capacity for customers including OpenAI.

That investment has temporarily pushed free cash flow into negative territory and increased investor concerns around debt and shareholder dilution.

Oracle’s backlog stands at about $664 billion, with roughly $300 billion tied to OpenAI. That concentration leaves the company more exposed to changes in spending plans or deployment timelines at one of its largest AI customers.

Investors are also monitoring Oracle’s net debt levels and BBB- credit rating as the company funds its infrastructure buildout.

Project Jupiter Adds Execution Risk

Delays at Oracle’s 2.45-gigawatt Project Jupiter facility in New Mexico have added another layer of uncertainty.

The company depends on a relatively small number of large data center projects, meaning setbacks at individual facilities can affect how quickly it brings new computing capacity online.

Project Jupiter has faced power-supply delays, increasing concerns around the timing of Oracle’s planned AI infrastructure expansion.

DA Davidson Flags Capital Constraints

DA Davidson analyst Gil Luria said in September that Oracle’s biggest challenge is not demand but access to enough computing capacity and capital to sustain growth.

He also highlighted Oracle’s leveraged balance sheet and said investors would watch for confirmation that the company completed its at-the-market equity offering and used the proceeds to reduce debt.

"Demand is not a problem," Luria said.

He added that Oracle could potentially earn better economics by selling available compute capacity in the market rather than locking it into long-term contracts.

Lebenthal Sees The Pullback As An Opportunity

Cerity Partners Chief Market Strategist Jim Lebenthal is taking a more constructive view and said he has added to his Oracle position following the decline.

Lebenthal told CNBC last Friday that lower interest rates could help Oracle because of its significant debt load, but his broader investment case centers on continued AI data center construction.

"If you believe in the artificial intelligence data center build-out, Oracle is one of the highest beta ways to play it," Lebenthal said.

He also said Project Jupiter’s recent power-supply delays contributed to the stock’s weakness and created what he considers "a good entry point."

Analysts Remain Broadly Positive

Oracle carries a Buy consensus rating with an average price forecast of $249.64.

Citizens maintained a Market Outperform rating and $285 forecast on Oct. 2. Freedom Broker maintained Buy but lowered its forecast to $205 on Sept. 14, while Argus Research maintained Buy and a $225 forecast the same day.

ETF Exposure Adds Trading Sensitivity

Oracle carries a 5.82% weight in the iShares Expanded Tech-Software Sector ETF and 5.64% weights in both the First Trust NASDAQ Technology Dividend Index Fund and FT Vest Technology Dividend Target Income ETF.

Those sizable allocations mean significant ETF inflows or outflows can translate into corresponding buying or selling pressure on Oracle shares.

Price Action

ORCL Stock Price Activity: Oracle shares were down 1.15% at $143.11 at the time of publication on Wednesday, according to Benzinga Pro data.

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