Why Oracle's debt load could be your problem

Oracle is one of those companies that you've probably heard of but may not deal with directly.

It's a multinational tech giant that sells enterprise software and computing power.

Yeah, Oracle's software involves the less glamorous programs that run businesses, the databases that keep track of inventory, health records, and supply chains.

The vast majority of big companies use its databases and software.

And investors really like Oracle's software business.

It's steady.

It makes a nice profit.

And about a decade ago, credit analysts viewed Oracle Bonds as a safe investment.

They were a high margin software company.

Now they're capital intensive data center build out.

This was a huge shift in business strategy.

Matt Sheridan is a senior lecturer in the finance department at the Ohio

State University.

I took Matt's investing class as a student.

He was one of my favorite professors, and this was an excuse to call him.

Matt analyzed credit before working as a professor, too.

The biggest issue with Oracle is their debt load is nearly doubled in the last two years.

They're sitting at $169 billion in total debt.

They're the fifth largest investment grade issuer now.

I think they're the second largest that's non-financial, only Amazon has more.

Oracle went into the AI boom in a weaker financial spot than other tech giants.

The company burned a lot of cash when it bought a health records company a few years ago.

Larry Ellison is the

co-founder, executive chairman at Oracle.

He thinks that training AI models is a huge business opportunity.