Oracle Launches $20 Billion Stock and Bond Sales to Fund AI Buildout, Shares Fall Nearly 9%

Oracle has begun raising about $20 billion through a combination of stock and bond sales to fund its artificial intelligence expansion, according to Tech Startups, which cites Reuters and an Oracle regulatory filing. Oracle's shares fell about 8.8% to $119.22 in Monday trading, the report says.

The details

According to Tech Startups, the package consists of two roughly equal parts:

• Equity: a $10 billion share offering, reportedly priced at $116 per share for about 86.2 million shares, an 11.2% discount to Friday's close.
• Debt: $10 billion across five fixed-rate note offerings maturing between 2029 and 2046, with coupons ranging from 7% to 8.65%.
• Closing: expected on November 4, subject to customary conditions.
• Stated uses: capital expenditures, debt repayment, acquisitions, dividends and share repurchases.

The $10 billion equity and $10 billion debt split matches what Oracle published after its October 28 investor day in Las Vegas. In that release, the company said capital-market fundraising through fiscal 2030 would be limited to $20 billion, excluding refinancing of existing debt.

Context from the investor day

Oracle's October 28 release set out several long-term targets:

• Total revenue of $225 billion or more in fiscal 2030, a compound annual growth rate above 35% from fiscal 2026.
• Non-GAAP earnings per share of $21 or more in fiscal 2030.
• Positive free cash flow in the second half of fiscal 2028, and at least $30 billion of free cash flow in fiscal 2029.
• Capital spending peaking in fiscal 2027 and 2028 before stepping down in fiscal 2029.

The company also said it had completed a $20 billion at-the-market equity offering in the first quarter of fiscal 2027, and that vendor financing, customer-provided hardware and customer prepayments should reduce its upfront cash needs.

Why it matters

Large AI data-center commitments have pushed Oracle to rely heavily on outside capital. Tech Startups reports the stock is down roughly 39% so far this year and that the company had about $125.3 billion of notes payable and other borrowings as of August 31. Investors will be watching whether the capital-spending peak and the cash-flow targets arrive on the timeline the company has laid out.

The share and bond terms in this article come from Tech Startups' summary; the Reuters report and the pricing documents were not independently accessible when this was written.