Oracle's AI Ambitions Come With a Growing Bill — and a Congressional Summons
Published on 09/17/2026 at 19:50 | Editorial boerse-global.de
Oracle finds itself telling two very different stories at once. On one side sits a cloud business posting the kind of growth that makes investors sit up straight. On the other, a workforce in retreat, a cash pile draining, and now a subpoena from Washington. How you read the company depends largely on which page you're looking at.
The operational headline is genuinely striking. Revenue for the first quarter of fiscal 2027 climbed 30% to $19.3 billion, while cloud infrastructure surged 121%. Remaining performance obligations — the backlog of contracted work — reached $664 billion, an increase of $209 billion in a single year. Fresh AI cloud contracts worth more than $30 billion underline that Oracle has a real seat at the infrastructure table.
The other side of the ledger
That growth, however, is being financed in ways that don't show up in a revenue line. Free cash flow sits deep in negative territory at roughly minus $5 billion. Restructuring costs jumped by $700 million to about $2.8 billion, a figure Oracle confirmed in an SEC filing would rise further to cover severance and contract terminations. Over the past fiscal year through the end of May, headcount fell by around 21,000 — a 13% reduction.
The cuts aren't finished. A second round of layoffs has been running since September 14, starting in the United States and now reaching India, where estimates put the toll at up to 3,000 positions. Product engineering has borne the brunt, with support and consulting hit to a lesser degree. Oracle hasn't published official numbers. Employees like Annanya Sharma, who spent more than seven years at the company, have taken to public forums to voice their frustration.
CFO Hilary Maxson, in the role since April, offered a notable admission at an internal town hall: the principle of "doing more with less" is not a workable path forward. Instead, she argued, processes that add no value for customers must be stripped away. Co-CEO Mike Sicilia struck a similar note, emphasizing customer outcomes.
Should investors sell immediately? Or is it worth buying Oracle?
Where the money is going
The contrast sharpens when you look at capital expenditure. In the first quarter alone, capex hit $28.5 billion, against $8.5 billion in the year-earlier period. For the full fiscal year 2027, Oracle is targeting $90 billion to $95 billion. That is an enormous wager, and it has to be funded from somewhere — which is precisely why the headcount reductions and the balance sheet deserve attention alongside the backlog.
Debt has become a central part of the story. Since 2022, Oracle has issued roughly $61.5 billion in bonds, with about a third of that earmarked for AI infrastructure. Fed Chair Kevin Warsh has pointed to the capital competition among AI hyperscalers — Oracle explicitly included — as one driver of rising credit costs. For a company borrowing this aggressively, a higher-rate environment bites quickly.
Washington turns up the heat
Politics has now entered the frame in a way that's harder to dismiss. The House Veterans' Affairs Committee has subpoenaed Chairman Larry Ellison and Co-CEO Mike Sicilia to testify under oath. Ellison is due on December 10, Sicilia on November 19. At issue is an expansion of the Department of Veterans Affairs' electronic health records contract, awarded without a competitive tender, whose ceiling was tripled from $10 billion to $27 billion — a $17 billion increase.
Separately, Oracle spent $3.44 million on lobbying for its "Project Jupiter" data center in New Mexico, seeking to influence an air quality permit. According to the state ethics commission, it ranks as the largest lobbying campaign ever disclosed in New Mexico. Neither item is likely to move the stock on its own, but together they sketch a company under pressure on several fronts while it tries to expand.
What the chart says
The shares changed hands at EUR 131.42, roughly 7% above the 50-day moving average of EUR 122.42 — a sign that the near-term recovery is holding. Zoom out, though, and the picture darkens: the stock is still down about 21% year-to-date, and sits 53% below its 52-week high of EUR 279.35. A single-session gain of 5.3% is a bounce off a low base, not a reversal.
The takeaway
Oracle is a company mid-transformation: commercially potent in its backlog, financially and organizationally strained everywhere else. The cloud and AI figures justify part of the recent share-price strength. That investors are willing to look past layoffs, negative free cash flow and congressional scrutiny says a great deal about their faith in the long-term AI narrative — and perhaps something about their willingness to ignore the risks stacking up in plain sight.
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