The red-hot trade backing artificial intelligence-related stocks has taken a bruising from a disappointing report from Oracle, reigniting concerns about frothy valuations and an AI bubble. Still, investors say reasons for optimism about AI remain intact,

Oracle (ORCL) shares fell more than 11% in after-hours trading, following the Q2 fiscal 2026 report, a sharp repricing that seemingly contradicts the main narrative of booming AI demand.

Oracle has spent years piling up debt to fund share buybacks, which raises the risk level of adding even more debt to the balance sheet. Thanks to heavy spending on AI infrastructure, Oracle ended the second quarter with about $108 billion in debt. That's up from $92.6 billion in May. The company completed an $18 billion bond sale in September.

Oracle's earnings also pulled down shares in other AI-related technology companies on Thursday. Nvidia's stock fell more than 3.5%, while shares of Advanced Micro Devices (AMD) were nearly 4% lower.

Oracle (NYSE:ORCL) fell more than 10% on Thursday after the company posted quarterly revenue that came in below Wall Street expectations. The company reported sales of $16.06 billion for the period, slightly under analyst forecasts.

Oracle’s stock fell more than 12% on Thursday on growing fears about the software giant’s massive AI spending — shaving more than $30 billion off co-founder Larry Ellison’s fortune. The Texas-based tech company’s stock tumbled to $194 a share from around $223 a share at the start of trading — wiping out $90 billion in market capitalization.

Explore how the Nasdaq reacted to Oracle's financial update and its impact on artificial intelligence-related stocks.

Oracle and other AI stocks tumbled on Thursday after the company reported surging expenditures related to its AI data center buildout, reinforcing concerns on Wall Street about debt-fueled spending on the fledgling technology.

Oracle’s credit default swaps have surged to near-record levels as soaring AI spending and a $100 bn debt load fuel fears of rising credit risk across the tech sector.