Oracle stock pops 11% as long-term revenue forecast and clarity on financing ease debt concerns — SkimNews
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- Oracle shares jumped 11% on Wednesday after the company forecast $225 billion in fiscal 2030 revenue, implying 35% average annual growth; LSEG projected $224.2 billion after expecting 8% growth in fiscal 2027 and acceleration over the next two years.
- Oracle said it will limit additional fundraising for fiscal 2027 through 2030 to $20 billion, split equally between equity and debt, with vendor financing, customer-provided hardware and customer prepayments expected to reduce upfront cash requirements.
- FactSet projects Oracle’s capital expenditures will jump another 65% this fiscal year to $91.9 billion, after they more than doubled to $55.7 billion in fiscal 2026.
- Oracle said free cash flow will turn positive in the second half of fiscal 2028 and exceed $30 billion the following year, while FactSet estimates negative $35 billion for this fiscal year and next.
- Oracle entered AI infrastructure last year to compete with hyperscalers such as Google and Amazon while providing capacity to OpenAI, and targets a fiscal 2030 operating margin above 40%.
- Oracle has issued $117 billion in long-term debt and holds an S&P BBB− rating, the lowest investment-grade tier; its five-year credit-default-swap spread is 277 basis points after reaching about 320 earlier this month, though it has nearly doubled this year.
- Oracle had lost about one-third of its value this year before Wednesday’s rally as rising interest rates and its heavy debt load fueled concern that the AI buildout would be too costly.
Why it matters: Oracle shareholders received a concrete financing bridge: a $20 billion fundraising cap, a 50-50 debt-equity mix and customer prepayments ease the cash strain behind an $91.9 billion capex plan. Creditors still face $117 billion of long-term debt and a BBB− rating, with Oracle’s 277-basis-point CDS spread nearly doubled this year.
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