Oracle shares tumble 11% on increased capital raise, cash concerns
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Oracle shares fell 11% after announcing a $20 billion share sale and a $40 billion capital raise, with negative free cash flow of $23.7 billion in the last fiscal year.
- Oracle reported fiscal Q4 revenue of $19.18 billion (up 21%) and adjusted EPS of $2.03, beating analyst estimates of $19.1 billion and $1.96 respectively.
- Oracle plans to raise $40 billion via debt and equity, including a $20 billion share sale, after raising $43 billion debt and $5 billion equity in fiscal 2026.
- Oracle's capex rose 162% to $55.7 billion, and CFO Hilary Maxson said net cash outlay for fiscal 2027 capex will be around $70 billion, excluding $20‑$25 billion prepayments.
- Oracle kept its FY2027 revenue guidance at $90 billion and lifted adjusted EPS forecast to $8.05, above analysts’ $8.01 estimate.
- Oracle's cloud infrastructure revenue jumped 93% to $5.8 billion, and its remaining performance obligation grew 363% to $638 billion (analysts expected $595.67 billion).
- Bank of America analysts noted that over 50% of the remaining performance obligation comes from OpenAI, tied to the Stargate AI infrastructure project.
Why it matters: Investors see the share price plunge as a warning that Oracle’s aggressive AI spend and $70 billion capex plan may outpace cash generation, while the $20 billion equity raise dilutes existing shareholders. The company’s revenue guidance remains unchanged, but cash‑flow strain could pressure analysts and limit future dividend flexibility.
