S&P kept Oracle investment grade. Its own numbers don’t support that call.

Would you believe me if I told you that debt investors will not change their viewpoint of a company who over the next few years is expected to increase revenue by 240%, debt by 410%, and barely generate a positive cash profit? Would you feel more confident if I told you this company is changing its business by heavily investing in technology that has not yet produced an adequate return on investment? Me neither.

Welcome to the current state of the AI thesis and the ratings decision provided by S&P Global Ratings (S&P) on Oracle .

But first, a little background.

The Big Three rating agencies (e.g., S&P, Moody’s Ratings, and Fitch Ratings) assign credit ratings to organizations.

Investors use these ratings to set firms’ borrowing costs.

The agencies utilize a similar rating scale, which highlights the likelihood of debt investors not earning back the money they lend to borrowers.

Low-risk firms receive an investment-grade rating (e.g., AAA, AA, A, and BBB), while high-risk firms receive a speculative-grade rating (e.g., BB, B, CCC, CC, C, and D).

Put simply, the worse an organization’s rating becomes, the higher the firm’s borrowing costs.

After all, debt investors can only earn their principle back plus interest.

There is no additional upside.

This sharpens their focus on return of capital rather than return on capital.

Back to Oracle.

After examining S&P’s July 9, 2026, decision to downgrade Oracle’s credit rating to BBB- (the last investment-grade rating possible), I had more questions than answers.

As I previously mentioned, S&P notes that revenue from fiscal years 2022 thru 2028 should increase 239%.