Oracle's Capital Expenditures Outpace Cash Flow as AI Investments Accelerate
Oracle is set to report its fiscal first-quarter results on September 10. The company plans a $70 billion capital expenditure budget for fiscal 2027, more than twice the $32 billion in operating cash flow it generated in fiscal 2026. This spending surge reflects Oracle's aggressive push into cloud infrastructure and AI contracts. To fund this expansion, Oracle expects to raise around $40 billion through debt and equity financing in fiscal 2027, including a stock offering program allowing up to $20 billion of new shares at market prices. Despite concerns about the growing gap between capital spending and cash generation—free cash flow turned negative by over $23 billion in fiscal 2026—the company remains optimistic due to strong revenue growth from its cloud infrastructure segment, which rose 77% last year. The quarterly report will provide early insight into whether Oracle is on track with the capital spending plan and how it's managing financing. The market has already responded positively, with shares rising over 10% in recent days.
Tickers: $ORCL