Oracle plans to raise $20 billion through bond and share sales, regulatory filings showed on Monday, as the software giant taps investors to fund its costly AI and cloud infrastructure build-out. The company filed a preliminary prospectus with the U.S. Securities and Exchange Commission, Reuters reported.
The $20 billion raise will be split evenly: $10 billion of new common stock and $10 billion of senior notes. The bond offering comprises six tranches maturing between 2029 and 2046, including one floating-rate tranche and five fixed-rate tranches. Interest rates, prices and the number of new shares have not been set.
Oracle said it would use the proceeds for general corporate purposes, including capital spending, debt repayment, acquisitions, dividends and share buybacks. The company’s $125.34 billion in notes payable and other borrowings as of August 31 dwarfs its fiscal 2026 revenue of $67.36 billion, illustrating how debt-financed the AI build-out has become.
Server racks. Photo: Florian Hirzinger, CC BY-SA 3.0, via Wikimedia Commons.
Five days after a financing cap pledge
The timing is the story. Just five days earlier, at its October 28 investor day in Las Vegas, Oracle had pledged to raise no more than $20 billion in additional financing for AI through fiscal 2030, a cap meant to calm Wall Street worries about its cash burn. The company split that cap evenly between $10 billion of equity issuance and $10 billion of gross debt, and said capital spending would peak this fiscal year and the next, TipRanks reported.
Monday’s filing effectively uses up that entire four-year financing capacity in one move. Chief Financial Officer Hilary Maxson had told investors at the event that free cash flow would turn positive in the second half of fiscal 2028 and exceed $30 billion in fiscal 2029, comments that sent shares up about 11% on Wednesday. The bond and stock sale reversed that: shares fell nearly 5% on Monday, extending a roughly 33% decline this year through Friday.
Why investors are nervous
Investors have focused on Oracle’s AI spending because it lacks the revenue scale of cloud rivals Microsoft and Amazon, and it has significant exposure to OpenAI, the loss-making maker of ChatGPT. Oracle is seeking to more than triple revenue to over $225 billion by fiscal 2030, with adjusted earnings topping $21 per share, while Wall Street expects adjusted profit per share of $8.14 for fiscal 2027, according to data compiled by LSEG.
The raise also comes after an earlier, similar round: back in February, Oracle completed a $25 billion debt deal alongside an earlier stock offering, saying at the time that it did not expect to issue more bonds in 2026. That guidance did not survive the year. The company’s 6.85% bonds due in 2066 fell more than 1.2 cents on the dollar on Monday, Tradeweb data showed, a sign that even existing bondholders are feeling the dilution.
Oracle’s $20B raise at a glance. Graphic: GPTOnline.
