Oracle shares fell roughly 4% in premarket activity on Monday after the company disclosed an ambitious funding plan to expand its cloud infrastructure. The software giant said it expects to raise between $45 billion and $50 billion this year to add capacity intended to meet contracted demand from a roster of large customers, including AMD, Meta, Nvidia, OpenAI, TikTok and xAI.
The capital-raising effort comes as enterprises and cloud providers increase capacity to support artificial intelligence workloads, even though the long-term returns from that spending remain uncertain. Investors reacted to the size of the planned fundraising and the potential implications for Oracle’s balance sheet, expressing concern over the company’s rising debt load.
Russ Mould, investment director at AJ Bell, summed up investor sentiment, saying: "The perception is that Oracle’s fortunes are now heavily tied to OpenAI and combined with the company’s plans to raise up to $50 billion to invest in 2026, nervousness about the situation looks unlikely to go away any time soon."
Oracle detailed that it intends to reach the financing target through about an even split of equity and debt instruments. The equity side may include equity-linked securities, common stock and an at-the-market program of up to $20 billion. On the debt side, the company plans to issue senior unsecured bonds early next year.
Analysts at Bernstein said that the proposed balance of debt and equity should help preserve Oracle’s investment-grade credit rating and reduce uncertainty about when and at what cost additional financing might be required. Still, the company faces heightened scrutiny following a bondholder lawsuit filed in January and a marked rise in the cost of insuring its debt late last year.
Cost measures used in credit markets reflected that pressure: the cost of insuring Oracle’s debt against default surged in December to its highest level in at least five years. Jefferies analysts commented that the financing plan "buys time" for Oracle’s AI ambitions, but cautioned it could pressure margins in the near term and forecast that free cash flow is unlikely to turn positive before fiscal 2029.
The announcement underscores a broader dynamic in the technology sector as companies commit significant capital to cloud capacity for AI workloads while investors weigh the timing and sustainability of returns. For Oracle, the funding program is positioned as a way to ensure it can deliver contracted capacity to major clients, even as questions about leverage, credit-market signals and near-term profitability remain front and center.