Oracle Capped Its AI Fundraising at $20 Billion Through 2030, Then Raised All of It in a Single Day

Last Wednesday, Oracle told investors exactly what they wanted to hear. New capital raises would be capped at $20 billion through fiscal 2030, split between stock and debt. The stock jumped about 11 to 12% the next day.

Five days later, Oracle raised the whole $20 billion at once.

Before the open on Monday, the company filed to sell $10 billion of common stock and $10 billion of senior notes. It stayed inside the cap. It just used all of it in one morning, and investors read that as a company that needed the money now.

Twenty three minutes

The timing was brutal for at least one analyst. That same morning Stephens upgraded Oracle to Overweight, arguing that investor day had answered the funding questions. The shelf filing landed 23 minutes later.

The stock fell about 8.6% on Monday, its worst day since June, closing at $119.20, its lowest since July 29. The investor day pop was gone. Over three sessions it lost nearly 18%, its worst three day stretch since 2002. Oracle is down about 38% this year and more than half over twelve months, while Microsoft, Amazon, Alphabet and Meta sit within about 5% of where they started.

Late Monday the deal priced. Oracle sold 86.2 million shares at $116, below Monday's close and well below the roughly $141 fifty day average, for about $9.9 billion net. The notes came at 7% for 2029, rising to 7.45% for 2031, 7.85% for 2033, 8% for 2037 and 8.65% for 2046. Both close on 4 November. The stated use is general corporate purposes, which can include capex, debt repayment, acquisitions, dividends or buybacks.

The new stock is under 3% of Oracle's market value. But Oracle had already sold $19.9 billion of shares between February and August.

A huge backlog, a thin rating

The bull case is a $664 billion backlog of contracted work. The bear case is the balance sheet carrying it.

Oracle burned about $24 billion of cash last fiscal year and expects around $70 billion of capex this year. It owed about $125 billion as of August, nearly twice shareholders' equity. Counting leases, total debt reached $169.1 billion at 31 August, against $75.9 billion in fiscal 2022.

S&P cut Oracle to BBB minus in July, one step above junk, and insuring its debt with credit default swaps costs about five times as much as Microsoft's. The big AI spenders are all leaning harder on borrowing; S&P recently put even Meta's AA minus rating on negative outlook over capex topping $225 billion. Oracle has much less room to absorb it.

Fitch kept its BBB rating and said that "following this capital raise, Fitch does not expect Oracle to raise material incremental capital over the rating horizon." Moody's affirmed but kept a negative outlook.

Oracle's own plan says capex peaks this fiscal year and next, with free cash flow turning positive in the second half of fiscal 2028 and topping $30 billion in fiscal 2029. Everything now rides on that schedule.

"If they have to come back to market in the back half of '27 after telling everyone this was the last of the capital needed ... look out," Pat Nerney of Dynasty Financial Partners told CNBC. The next test comes with second quarter results in December.

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