Oracle to Raise $40B, Spend $95B on AI Buildout
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- Oracle plans to raise nearly $40 billion in fiscal 2027 through debt and equity, including a previously announced $20 billion at-the-market equity issuance.
- Oracle forecast capital expenditures of up to $95 billion in fiscal 2027, with CFO Hilary Maxson breaking it down as $70 billion of Oracle's own spending plus $20-25 billion expected to be repaid by customers (analysts had expected $67.66 billion).
- Oracle shares fell 8.9% in extended trading as analysts including eMarketer's Jacob Bourne flagged concerns about the rising debt load and Oracle's still-negative free cash flow.
- Oracle already blew past its 2026 capex target, spending $55.66 billion versus the $50 billion it had guided to.
- Oracle beat Q4 estimates with $19.18 billion in revenue (vs. $19.10B expected) and adjusted EPS of $2.03 (vs. $1.96), while its remaining performance obligations jumped to $638 billion, above the $592.52 billion consensus, with $76.56 billion expected to convert in the next 12 months.
- Oracle's Texas Stargate data center, built with OpenAI, is more than three-quarters complete within 90 days, and OpenAI said customers can now access its coding models on Oracle's cloud.
- Oracle CEO Clay Magouyrk told analysts fiscal Q1 2027 delivery is approaching one gigawatt — nearly the same capacity the company delivered across the previous four quarters combined — and the CFO warned gross margins will 'step down' in fiscal 2027 as data-center projects ramp.
Why it matters: Oracle's $95 billion fiscal 2027 capex — nearly double the $55.66 billion it just spent — paired with a $40 billion raise, shows the AI cloud race has become a balance-sheet arms race. The 8.9% after-hours drop signals investors see the $638 billion backlog as real revenue, but the cash to fund building it out isn't here yet, and Oracle's own CFO warned gross margins will 'step down.'
