TLDR
Oracle stock drops 7.51% to $120.86 after announcing a $20 billion fundraising plan.
Oracle plans $10 billion in bond sales and another $10 billion through a stock offering.
Oracle’s $125.34 billion debt pile raises fresh concerns over its AI expansion costs.
Oracle expects positive free cash flow in the second half of fiscal 2028.
Oracle targets $225 billion in revenue as it expands its AI and cloud infrastructure.
Oracle (ORCL) shares dropped 7.51% to $120.86 on Monday, losing $9.81 during the trading session. The decline followed the company’s announcement of a $20 billion fundraising plan through debt and equity offerings. The move renewed concerns about rising borrowing costs and the financial pressure surrounding Oracle’s expanding artificial intelligence infrastructure.
Oracle Corporation, ORCL
Oracle Announces $20 Billion Debt and Equity Fundraising Plan
Oracle plans to raise $20 billion through separate bond and stock offerings, according to regulatory filings. The company intends to secure $10 billion through a stock sale and another $10 billion through bond issuance. However, Oracle has not established the offering prices, interest rates or number of shares involved.
The company plans to use the proceeds for several corporate purposes, including infrastructure spending and debt repayment. Other potential uses include acquisitions, dividends, share buybacks, and additional business investments. The fundraising will support Oracle’s broader expansion as demand for artificial intelligence and cloud computing increases.
The bond offering includes six tranches with maturities ranging from 2029 to 2046. Five tranches will carry fixed interest rates, while another will feature a floating rate. Meanwhile, Oracle’s existing 6.85% bonds due in 2066 fell more than 1.2 cents on the dollar.
Oracle Debt Concerns Grow Amid Expanding AI Infrastructure Spending
Oracle’s latest fundraising plan highlights the financial demands of its artificial intelligence expansion. The company continues investing heavily in data centers and cloud infrastructure to serve major AI customers. Its growing commitments have raised questions about financing costs and the returns expected from these investments.
Oracle reported $125.34 billion in notes payable and other borrowings as of August 31. Meanwhile, the company generated $67.36 billion in revenue during fiscal 2026. This comparison highlights the scale of its existing debt relative to its annual business revenue.
Oracle faces competition from larger cloud providers, including Microsoft and Amazon. Both companies have substantial cloud operations and significant resources for expanding artificial intelligence infrastructure. Oracle also maintains considerable exposure to OpenAI, the ChatGPT developer, which continues operating at a loss.
CreditSights analysts noted that Oracle’s debt trades like Double-BB-rated securities despite its low investment-grade credit ratings. This reflects growing concerns about the company’s borrowing requirements and exposure to large infrastructure commitments. Furthermore, increased technology sector borrowing has made credit markets more selective about AI-related financing.
Oracle Targets Positive Free Cash Flow as Spending Peaks
Oracle previously outlined plans to limit additional capital market financing through fiscal 2030. The company identified $20 billion as its target for additional financing during that period. Monday’s combined offerings match that amount, following management’s recent clarification of its funding strategy.
The company also expects capital spending to peak during the current fiscal year and the next. However, Oracle anticipates positive free cash flow during the second half of fiscal 2028. That projection follows an investor update that helped lift its shares approximately 11% last Wednesday.
Oracle aims to increase revenue beyond $225 billion by fiscal 2030. It also expects adjusted earnings to exceed $21 per share during that period. For fiscal 2027, analysts currently project adjusted earnings of $8.14 per share, according to LSEG data.
Oracle’s shares have declined more than 60% from their September 2025 closing peak. The decline reflects concerns about its ability to generate sufficient returns from AI investments. Meanwhile, its substantial borrowing requirements continue adding pressure to the company’s financial outlook.
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