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Editor’s Note: Our friend Louis Navellier is a regular guest at Mar-a-Lago, President Trump’s private residence in Palm Beach Florida. He’s also one of America’s top tech investors, managing a $1.1 billion portfolio – including $358 million in AI stocks. (He recommended Nvidia to his followers before it soared 44,000%.) In addition, he predicted the Dot-Com crash. He called Google’s rise. And now he has a shocking warning about the SpaceX IPO that all Americans deserve to hear. See below for details.

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SpaceX went from a $1.75 trillion IPO – the biggest in history…

To a $2.5 trillion valuation just days later.

Elon became the world’s first paper trillionaire.

But Elon’s dreams of dominating space and AI could soon come crashing down.

And the SpaceX hype train continues, despite some choppy performance in the stock.

But I’m writing to you with an urgent warning.

Do not invest a DIME in SpaceX until you’ve heard what’s coming.

Because Donald Trump has signed Executive Order (#14363).

Not only could it render SpaceX’s AI technology obsolete…

It could trigger a $100 trillion “reset” of the AI markets in America.

And it could “roll back” all the stock’s early gains in the process.

How could Trump’s executive order end Elon’s dreams of AI dominance?

How could it send shares of one obscure AI stock soaring?

And how could you turn this into a massive opportunity, starting now?

Simply click here for my brand-new presentation revealing all the details.

I even reveal the name and ticker of one company poised to profit, for free.

Fair warning: This information is very time sensitive.

I could take it down at any time.

So please don’t delay.

Inform yourself now, before you invest a dime in SpaceX.

Louis Navellier
Senior Investment Analyst, InvestorPlace

P.S. I consider this the biggest prediction in my 40-year career. Trump’s executive order could send shockwaves throughout the AI economy. As you’ll see, he’s building a new AI technology 283 trillion times more powerful than Elon’s. It may sound crazy. But it’s 100% true. And understanding exactly what’s coming could save you a lot of money in 2026… while getting you in early on the biggest AI revolution ever.

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Oracle Got Downgraded. The Stock Went Up.

Something unusual happened to Oracle today. S&P Global Ratings cut its long-term issuer credit rating on the company to BBB-, the lowest rung of investment grade before junk territory. The stated reason: rising business risk and weaker cash flow. One more downgrade and a company that has never issued subprime debt would officially be there.

The stock went up anyway.

That is not a normal reaction. And it is one of the more interesting signals in the market right now.

What Actually Happened

S&P Global Ratings downgraded Oracle from BBB/A-2 to BBB-/A-3 today, citing rising business risk and weaker cash flow, though the long-term outlook was left as stable. A drop to BBB- is a significant psychological and financial blow for a tech blue-chip. It leaves Oracle just one notch above speculative grade, commonly known as junk status.

Here is the part that makes it more complicated. Investors chose to focus on Oracle’s $638 billion backlog of cloud contracts rather than the immediately apparent threat to its balance sheet. That is not irrational. It is a bet. The question is whether it is a well-informed one.

Q4 FY2026 revenue rose to $19.2 billion, up 21% year over year, with total cloud revenue at $9.9 billion, up 47%. Cloud infrastructure alone grew 93%. Full-year revenue reached $67.4 billion, and GAAP EPS increased 34% to $5.83. Cloud infrastructure revenue for the full fiscal year came in at $18.1 billion, up 77%. And Remaining Performance Obligations, the signed contract backlog, hit $638 billion, up 363% year over year.

That backlog number is real. Signed contracts. Not projections.

The Number Equity Investors Keep Skipping

Fiscal 2026 capital expenditures were $55.7 billion, up 162% year over year and above Oracle’s own $50 billion target, producing negative free cash flow of $23.7 billion despite $32.0 billion of operating cash flow. That is not a rounding error. That is a structural cash hole.

And to fund it, Oracle raised $43 billion in debt financing and $5 billion in equity financing in fiscal year 2026. For fiscal year 2027, Oracle expects to raise approximately $40 billion more through a combination of debt and equity, including a previously announced $20 billion at-the-market equity issuance.

Slight tangent, but it matters: most investors think of equity issuance as a secondary concern. At this scale, it is not. To protect its remaining investment-grade rating, Oracle is leaning heavily on equity dilution. Following a $5 billion mandatory convertible preferred stock issuance in February 2026, the company plans an additional $20 billion equity issuance later this calendar year. That is shareholder value being eroded to fund datacenter construction. Every share you hold today buys a smaller piece of the backlog tomorrow.

The Credit Market Is Already Saying Something the Stock Is Not

This is where it gets interesting. Equity analysts from Piper Sandler maintain an Overweight rating with a $225 price target, implying roughly 60% upside from current levels near $140. The broader analyst consensus sits closer to $252-$268, implying upside in the 75%-90% range depending on the source. Meanwhile, credit markets are demanding the highest-ever premium to insure the company’s debt. That disconnect is not noise. It is a genuine disagreement between two very sophisticated pools of capital.

Credit investors get paid back before equity holders. They are almost always more conservative. When they are this alarmed on a company that equity analysts are still calling a buy, the gap deserves serious attention.

S&P now projects Oracle’s fiscal 2027 capital expenditures at $90 billion to $95 billion, a massive leap from its previous $60 billion forecast, driven by soaring AI chip costs and new datacenter builds. The agency also projects the fiscal 2027 free operating cash flow deficit will widen to roughly negative $42 billion, nearly double the prior projection. The cash burn does not reverse quickly. The bull case requires holding through years of dilution and debt issuance before the backlog starts converting at scale.

The Backlog Is Real. The Conversion Is Not Guaranteed.

According to Oracle’s 10-K filing, only about 12% of the $638 billion in contractual obligations is expected to convert into revenue in the next fiscal year. The remainder stretches years into the future, leaving the company exposed to risks such as customers failing to renew, construction delays, and power shortages that could stall new datacenter operations.

Multiple reports estimate that roughly half of the $638 billion backlog, approximately $300 billion, is tied to Oracle’s relationship with OpenAI through Project Stargate. If OpenAI’s computing needs keep growing, Oracle wins big. If OpenAI’s demand or funding tightens, Oracle absorbs the loss through leases and debt already on its books. OpenAI has simultaneously made commitments to other cloud providers including Microsoft and Amazon, and has commitments totaling well over $1 trillion across the industry, raising real questions about its capacity to honor all of them.

That concentration is the part most investors are not modeling correctly. A diversified backlog is a moat. A backlog built around a single counterparty’s AI ambitions is a bet on that counterparty.

Options Market Behavior

With the S&P downgrade landing today and the stock gaining ground, implied volatility remains elevated relative to recent history. Recent options flow data shows calls outpacing puts, with a put/call ratio around 0.35, well below the typical 0.65 benchmark. That skew suggests short-term traders are leaning bullish, while the stock has fallen on 18 of the last 22 trading days and sits more than 50% below its 52-week high of $345.72. The equity-credit divergence creates a scenario where both put buyers and call sellers can make a case. For traders looking for resolution in either direction, defined-risk structures around the August or September expiry allow participation without binary exposure to the financing timeline. Implied volatility rank has moved higher this week as uncertainty around Oracle’s capital structure has increased. Worth monitoring closely heading into any institutional rebalancing tied to index-grade credit requirements, which could accelerate forced selling if Moody’s follows S&P’s move.

Bull Case. Bear Case. What to Watch.

The bull case is straightforward. Analysts maintain buy ratings with average price targets well above current levels, and the payoff is expected to arrive after 2027, when new facilities begin generating profits at scale. Cloud revenue guidance of 58% to 64% growth into Q1 FY2027 supports that view if execution holds. FY2027 revenue guidance of $90 billion implies 34% growth. The backlog, if it converts, dwarfs the debt.

The bear case is equally clear. The high-debt, high-capital-consumption expansion model leaves management with very little room for error, and the sharp stock price swings over the past several months have fully demonstrated how quickly market sentiment can turn. Oracle stock suffered its worst week in 25 years in mid-June and has declined roughly 25% year to date. A Moody’s downgrade following S&P’s move could trigger forced selling from investment-grade-only funds. That would be a mechanical pressure event entirely separate from the business fundamentals.

The risk analysis comes down to one question: does Oracle have enough time and financing flexibility to bridge from negative free cash flow today to the backlog conversion that justifies the stock? As one analyst put it after the earnings call: the demand is real, but the funding question is getting harder, not easier, with capex coming in well above estimates and free cash flow still negative.

What This Means for the Broader Market

Oracle is not unique in this dynamic. Amazon, Google, and Microsoft all face versions of the same fundamental tension: debt-funded spending against the promise of long-term AI monetization. The Oracle downgrade is a preview of the accounting reckoning that the entire AI infrastructure buildout will eventually face. What makes Oracle’s version more acute is the leverage ratio and the customer concentration, both of which are more extreme than its hyperscaler peers.

When S&P moves on Oracle, the next question is whether Moody’s follows. And whether the market, which has so far chosen to look past the credit signal at the backlog number, keeps doing so when the institutional forced-selling clock starts ticking.

Today’s gain on a junk-adjacent credit downgrade is either a sign that equity investors see something the bond market is missing, or a sign that the bond market is one rating action ahead of where the stock is priced.

That gap is the real question.