S&P cuts Oracle to BBB-, one notch above junk, on AI spending and cash deficit

S&P Global Ratings lowered Oracle's long-term issuer rating from BBB to BBB- on July 9, 2026, and cut its short-term rating to A-3, with a stable outlook. The agency pointed to heavy AI infrastructure spending, rising debt and sharply negative cash flow, and named OpenAI concentration as a risk. One more downgrade would take Oracle's rating into junk territory.

• Long-term rating cut from BBB to BBB-; short-term from A-2 to A-3; outlook stable
• S&P projects a fiscal 2027 free cash flow deficit of nearly $42 billion, versus its earlier forecast of negative $24 billion
• S&P's view of fiscal 2027 capex is $90 billion to $95 billion, versus its earlier $60 billion forecast
• OpenAI concentration named as a key risk