Oracle plans $20B raise to fuel its AI push
What's the story
Oracle has announced plans to raise $20 billion through the sale of new stock and bonds. The tech giant intends to issue $10 billion in common stock and another $10 billion in senior notes, according to a filing with the US Securities and Exchange Commission (SEC). The move was first revealed at Oracle's investor day last week.
Fund allocation
Funds to be used for general corporate purposes
Oracle plans to use the funds raised from this stock and bond sale for general corporate purposes. These could include capital expenditures, debt repayments, and future investments.
The company's shares have already been under pressure due to investor concerns over the high debt burden being taken on for AI infrastructure funding.
Oracle's stock has fallen 33% in 2026 and 50% in the last year.
Investment strategy
Capital spending to peak this fiscal year and next
The fundraising effort highlights the scale of Oracle's AI investment as it aims to more than triple its revenue by fiscal 2030.
The company has said that capital spending will peak this fiscal year and the next, while promising not to raise more than $20 billion in additional financing for AI through fiscal 2030.
Despite a 3.5% drop in shares during premarket trading, Oracle is pressing ahead with its plans.
Market outlook
Wall Street expects adjusted profit per share at $8.14
Wall Street expects Oracle's adjusted profit per share for fiscal 2027 to be $8.14, according to data compiled by LSEG.
The bond offering includes six tranches maturing between 2029 and 2046, one of which is a floating-rate tranche while the rest are fixed-rate ones.
The interest rates, prices, and number of shares have yet to be determined.