On September 10, 2025, the Oracle logo appears on a building at the Oracle campus in Redwood Shores, California.
Justin Sullivan | Getty Images
oracle on Monday filed a plan to issue new stock and issue additional debt to fund its artificial intelligence expansion.
The hyperscaler plans to sell $10 billion in common stock and $10 billion in senior debt, according to a filing with the Securities and Exchange Commission. The funding had already been outlined at an investor day last week, but shares fell more than 6% on Monday.
“This looks like exactly what they previewed,” said Rob Oliver, senior research analyst at Baird. “Then I don’t know why the market is excited about this.”
Oracle said it plans to use the proceeds for general corporate purposes, including capital expenditures, debt repayments and future investments.
Oracle daily performance
The hyperscaler’s stock price initially rebounded after last Wednesday’s investor day, where Oracle announced fiscal 2030 revenue projections of at least $225 billion. At the time, Oracle also announced that it would limit additional capital market financing to $20 billion during the fiscal 2027-2030 investment cycle.
“This is a huge relief given the current state of the bond market and concerns about the cost of capital (although UBS maintains that these bond market concerns are exaggerated),” UBS analyst Karl Keilstedt said in a note on Thursday.
Oracle plans to rely on vendor financing, customer-supplied hardware, and customer prepayments to become free cash flow positive, and expects to reach that goal in the second half of 2028.
Shares and bonds of Oracle, co-founded by former CEO Larry Ellison, have come under pressure as investors grow concerned about the company taking on massive debt to fund its AI infrastructure.
Oracle stock is down 33% in 2026 and 50% over the past 12 months. The yield on a 4.95% investment grade corporate bond due in 2031 is currently 7.267%.
The change in sentiment is also seen in Oracle’s five-year credit default swap, which is insurance against default. The spread was 296, up 270% in one year. That’s roughly in line with high-end junk bond ratings, said Gavan Nolan of S&P Global Market Intelligence.
Oracle’s 5-Year Credit Default Swap (November 2, 2026)
Although Oracle still has an investment-grade credit rating, it was downgraded by S&P in July to BBB-, one spot above the high-yield bond rating. As of Aug. 31, the company had $125.34 billion in debt, mostly senior debt.
For Oracle, execution is ultimately what matters, Pat Nurney, head of investment solutions at Dynasty Financial Partners, said in an email to CNBC on Monday.
“Can they do what they’re trying to do? We see this as a story for the entire AI field,” he said. “If this is done as planned, they will be rewarded. If they have to come back to the market in late 2027 after telling everyone this is the last money they need…watch out.”
— CNBC’s Seema Mody and Ari Levy contributed reporting.
