Oracle Corporation (ORCL) shares fell 3.4% in Wednesday afternoon trading and closed near $139.59, down 3.6% on the day, after the company issued a force majeure notice tied to its Project Jupiter data center in New Mexico. The notice was addressed to a unit of Blue Owl Capital, the developer building the site.

CNBC first reported the news, citing an earlier Bloomberg story. Force majeure clauses are standard contract provisions that allow a party to suspend its obligations when events beyond its control prevent performance, and through this notice Oracle is seeking the option to delay payments on the campus if it fails to open on schedule in 2028.

Project Jupiter is a key component of the broader State AI infrastructure push, the AI data center venture announced in January 2025 with OpenAI, SoftBank, Oracle, and MGX as founding equity partners. The New Mexico site has encountered regulatory hurdles, local opposition ahead of the midterm elections, and pressure from environmental groups. Blue Owl Capital shares also declined on the news, as investors weighed the risk of delayed AI capacity and financial strain connected to the project.

The Financial Times reported that $18 billion in debt linked to the data center is already trading at stressed levels, a signal that bond investors are pricing in additional risk.

Oracle pushed back on the concerns. The company told CNBC that Project Jupiter remains on schedule and that it is “fully committed to New Mexico.” Co-CEO Clay Magouyrk also addressed the topic during the September 10 earnings call, telling analysts that the data center would not affect Oracle’s fiscal 2027 revenue or earnings guidance.

Bond Market Pressure Builds

Wednesday’s stock decline came alongside sharper moves in Oracle’s debt. Credit default swaps—contracts that protect investors if Oracle cannot repay its debt—hit a record high. The yield on Oracle’s 6.7% bonds due in 2056 climbed above 8% for the first time ever, meaning investors are demanding greater compensation to hold the company’s debt.

Oracle still carries an investment-grade credit rating for now. However, ZeroHedge noted that roughly $120 billion of Oracle bonds could be pulled from investment-grade indexes if that rating slips to junk status—removal that would force index-tracking funds to sell and potentially add to the pressure on Oracle’s borrowing costs.

Broader bond market conditions are not helping. The 30-year Treasury yield moved above 5.4%, its highest level since 2004, and the 10-year yield climbed past 5.1%. Rising government yields typically lift corporate borrowing costs as well—a challenge for Oracle given the amount of capital it needs for its AI buildout.

Credit spreads have widened across other large technology companies too. Reuters estimates that hyperscaler debt issuance could reach $420 billion next year, underscoring how heavily the industry’s AI expansion now relies on bond markets.

A Familiar Pattern for ORCL

The move is not Oracle’s first sharp swing recently. Shares have been extremely volatile, posting 37 moves greater than 5% over the past year.

Six days earlier, Oracle dropped 3.4% after Business Insider reported that Magouyrk told staff during an internal town hall that the company had struggled to make generative AI useful internally, despite spending billions building AI infrastructure for outside customers. Chief Information Officer Jae Evans reportedly said Oracle faced sticker shock from the high cost of OpenAI’s GPT-6 Astra models. The report also pointed to software bottlenecks and high false-positive rates from Anthropic’s Mythos tool.

Oracle is now down 28.6% since the start of the year. At $139.59, the stock sits 55.4% below its 52-week high of $313, set in October 2025. Despite the decline, a $1,000 investment in Oracle five years ago would be worth about $1,553 today.

Wall Street analysts remain largely bullish. The consensus rating is Strong Buy, based on 27 Buy ratings, four Holds, and one Sell over the past three months. The average price target stands at $245.75, implying 76% upside from current levels—a more optimistic read than the caution embedded in Oracle’s bond prices. From here, investors have two markers to watch: whether the New Mexico campus meets its 2028 opening date, and whether Oracle’s investment-grade rating holds.

Source: CoinCentral