New York, Feb 2, 2026, 08:28 (EST)
- Shares fell about 4% in U.S. premarket trading after the funding details were released.
- The company is targeting $45 billion to $50 billion in funding by 2026 to accelerate its cloud infrastructure growth.
- A $20 billion share-sale program and equity-linked issuance are in the works, with a bond offering also planned.
Oracle shares tumbled about 4% in premarket trading Monday after the company revealed plans to raise between $45 billion and $50 billion by 2026 to expand its cloud infrastructure. Led by billionaire Larry Ellison, the software giant is pushing for this massive funding round as investors worry about its rising debt levels. (Reuters)
Big tech is still pouring resources into data centers for artificial intelligence, but investors are growing wary, unsure about the timeline and scale of any payoff. Spending is under pressure as a result.
Oracle is pushing big on financing to boost its cloud footprint, aiming to catch up with giants like Amazon, Microsoft, and Alphabet. A Bloomberg Law report highlights how this signals the huge sums pouring into AI development. (Bloomberglaw)
On Sunday, Oracle revealed plans to raise $45 billion to $50 billion in gross cash throughout 2026 via a “balanced” mix of debt and equity. The company will roll out a new at-the-market program, letting it sell up to $20 billion in shares gradually at market prices. It also intends to issue mandatory convertible preferred securities that will eventually convert into common stock. Goldman Sachs & Co. LLC will lead the bond offering, with Citigroup managing the equity deals, Oracle confirmed. (PR Newswire)
Oracle revealed that the new funds will expand capacity for its Oracle Cloud Infrastructure clients, including AMD, Meta, Nvidia, OpenAI, TikTok, and xAI. Yet, investors are cautious about Oracle’s AI infrastructure growth, as much of its future depends on OpenAI—a still unprofitable company that hasn’t explained how it will cover infrastructure costs, Reuters reported. In January, bondholders sued Oracle, and the price of insuring its debt with credit default swaps—a form of default insurance—hit a five-year peak last December, Reuters added. (Reuters)
Analysts are split on how Oracle’s new financing will impact its balance sheet and near-term results. Bernstein argues the debt-equity mix should maintain Oracle’s investment-grade rating and settle questions around future funding. Jefferies sees the move as a way to “buy time” but warns it could squeeze margins and delay positive free cash flow until fiscal 2029. Russ Mould, investment director at AJ Bell, added, “The perception is that Oracle’s fortunes are now heavily tied to OpenAI.” (Business Recorder)
The financing plan leaves very little room for mistakes. If credit markets stiffen or the equity piece comes with a steep discount, it means paying more interest, facing dilution, or possibly both.
Execution carries its own risks. Large data center projects frequently fall behind schedule, yet the “contracted demand” still needs to generate revenue and cash flow on the timeline investors anticipate.
Investors are watching closely for the timing of the bond deal and the pace at which the company taps the at-the-market share program, since these moves can trigger shifts in funding costs each quarter.
