Oracle Announces $40 Billion Financing Plan Amid Rising Debt Costs and Capital Expenditures
Oracle has announced plans to raise approximately $40 billion in fiscal 2027 through a mix of debt and equity financing, aimed at funding its AI datacenter expansion. This follows significant capital expenditures—$28.5 billion in the most recent quarter—that pushed free cash flow into negative territory for the first time in years. Despite strong demand signals such as $30 billion in new AI cloud contracts and a 121% year-over-year increase in cloud infrastructure revenue, Oracle's financials show growing pressure from rising interest expenses and heavy reliance on external financing. The company’s debt load has surged to $155.9 billion, with remaining performance obligations of $664 billion expected to convert into sales over the next 36 months at best. This long-term revenue outlook contrasts sharply with immediate cash flow challenges as Oracle's stock price has dropped by half in a year amid investor concerns about its financial sustainability and debt servicing costs.
Tickers: $ORCL
Topics: AI cloud buildout capital expenditures debt financing free cash flow Oracle