Bitcoin traded near $90,000, down 2.8% over 24 hours, while Nasdaq futures fell 0.80% following Oracle's disappointing fiscal second quarter earnings. The software giant reported revenue below expectations and increased debt, raising concerns about AI infrastructure spending. Shares in Oracle dropped over 10% in after-hours trading, impacting risk assets including cryptocurrencies.
Risk assets faced pressure on Thursday despite the Federal Reserve's rate cut, as Oracle's earnings report amplified worries over the AI sector's sustainability. Bitcoin, the leading cryptocurrency, slipped below $90,000, marking a 2.8% decline in the past 24 hours based on market data. Futures for the Nasdaq, Wall Street's technology-focused index, were down 0.80%.
Oracle released its fiscal second quarter 2026 results on Wednesday, covering the period ended November 30, 2025. Total revenue fell short of consensus estimates, with legacy software revenue declining and new license sales performing particularly weakly. Cloud infrastructure revenue reached $4.1 billion, missing expectations, while the company announced a $15 billion increase in planned data center spending. Long-term debt rose to $99.6 billion, a 25% jump from the previous year.
The earnings miss overshadowed Oracle's growth in AI-related areas, highlighting delays in cash flows from debt-fueled infrastructure investments. Morgan Stanley projected Oracle's net debt could surge to about $290 billion by 2028. In after-hours trading, Oracle shares tumbled more than 10%, pulling down other AI-linked stocks and signaling caution to cryptocurrency traders.
Market reactions included a spike in Oracle's five-year credit default swaps to 117 basis points, the highest since 2022. According to the Special Situations newsletter, 'Historically, ORCL CDS traded around 20–40 bps, so 117 bps represents a material repricing of risk, but not a distressed profile.' It further noted, 'Oracle 5Y CDS graph looks exciting $ORCL until you run the math and realize that it is only pricing in 1.93% probability of default per year and a 9% 5 year cumulative probability of default.'
This repricing reflects broader concerns about the gap between AI hype and actual revenue generation, contributing to the sell-off in tech and crypto markets.
