Oracle's stock is trading at about 23 times its trailing profits, which is right in line with the S&P 500 average. While it may look cheaper these days, it may still not offer investors enough margin of safety to offset the risks associated with its high debt load and exposure to OpenAI.

Oracle (ORCL) earned almost a quarter more operating income last fiscal year. Yet its stock closed around 53% below its peak of a year earlier on September 10, just before its latest results. A gap like that points to one of two things: the market sees trouble the numbers do not show yet,

Oracle is scheduled to report earnings after the closing bell Thursday, with traders anticipating a big move from the database and cloud infrastructure giant’s stock.

Oracle shares have crashed on concerns over its AI infrastructure spending.

Adding to investor pessimism today is the growing belief among investors that the Federal Reserve may hike rates at its next meeting. That could make Oracle's current AI spending even more expensive than it already is. Oracle stock was down by 4.5% as of 11:04 am ET.

Options are relatively affordable at the moment too. This is per ORCL's Schaeffer's Volatility Index (SVI) of 49% stands higher than just 11% of all other readings from the past year, implying that near-term option traders are pricing in relatively low volatility expectations.

Oracle Corporation is downgraded to Hold: strong cloud growth but negative free cash flow and high capex weigh on sentiment. Click for this ORCL stock update.