Cloud giant Oracle is raising another $20 bln for AI spending; shares dip over 6%

Cloud giant Oracle on Monday launched a $20 billion fundraising effort to finance its massive data center investments, seeking half through a bond offering and half through a stock sale. Just days earlier, Oracle had promised investors worried about its heavy debt load that it would raise no more than $20 billion in additional capital through the end of fiscal 2030, excluding funds to refinance existing debt. The hyperscaler’s shares, already down more than a third this year, fell more than 6% on news of the offerings.

Oracle is selling $10 billion of bonds in six tranches with maturities ranging from three to 20 years, a source told Bloomberg. Initial pricing guidance for the longest-dated tranche is around 3.6 percentage points above U.S. Treasuries, the source said. Oracle is offering a premium of around 0.5 percentage points over its existing debt to attract investors, on Bloomberg's numbers.

The company also plans to sell $10 billion of stock. The hyperscaler intends to use the proceeds for general corporate purposes, including capex, debt repayment, acquisitions, dividends, and share buybacks. BofA is leading both offerings.

The market reacted to Oracle’s fundraising by selling off: the stock tumbled more than 6% on Monday to its lowest level since July. The hyperscaler’s shares have lost more than 36% year to date amid concerns about its growing debt load and returns on AI investments.

At its investor day last week, Oracle announced plans to reduce capex starting in fiscal 2029 and limit additional fundraising to $20 billion and gross debt growth to $10 billion through May 2030. The management projected positive free cash flow of $30 billion in the fiscal year ending in May 2029, even though analysts had forecast a negative figure. The management also reaffirmed its fiscal 2030 revenue forecast of $225 billion. This somewhat eased concerns about returns on AI investments, Bloomberg noted, as Oracle shares rose as much as 11% on October 28, while a gauge of the company’s credit risk fell sharply.

Oracle’s debt stood at around $125 billion at the end of August. In the previous fiscal year, the company raised $43 billion. Oracle sold $18 billion of bonds in September 2025, and in January, holders of those securities filed a class action lawsuit against the company, alleging they suffered losses after Oracle returned to the market for a new $38 billion loan just seven weeks after the earlier offering.

In the current fiscal year, Oracle has already raised $20 billion through stock sales. Including future data center lease payments, Oracle’s total debt could approach $300 billion by 2028, Morgan Stanley estimates.