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Oracle (ORCL) shares fell 8.8% on Monday, Nov. 2, after the database software giant announced plans to raise $20 billion through stock and debt offerings to finance its growing artificial intelligence infrastructure business.<\/p>\n
The company filed with the Securities and Exchange Commission to sell $10 billion in common stock and issue another $10 billion in senior notes.<\/p>\n
The announcement renewed concerns about how Oracle will finance its AI expansion and whether those investments will pay off.<\/p>\n
Oracle lays out $20 billion financing plan<\/p>\n
Oracle has been spending heavily to expand its cloud infrastructure as demand for AI computing capacity grows.<\/p>\n
Long known for its database software, the company has increasingly positioned itself as a cloud infrastructure provider, competing with Amazon Web Services, Microsoft Azure and Google Cloud.<\/p>\n
Also read: Non-AI stock surges 20% after earnings beat and raised outlook<\/p>\n
Building that business requires substantial investment in data centers, servers and networking equipment.<\/p>\n
The latest financing plan follows Oracle’s investor day on Oct. 28, when management outlined its long-term financial targets and addressed questions about how it would fund its expansion.<\/p>\n
Oracle said it would limit additional capital raises through fiscal 2030 to $20 billion, excluding refinancing of existing debt. That amount would be split between $10 billion in equity and $10 billion in gross debt. <\/p>\n
Monday’s filing outlined offerings matching those amounts.<\/p>\n
The stock sale could dilute existing shareholders, while issuing more debt would add to Oracle’s borrowing obligations.<\/p>\n
Still, management expects its financial position to improve as investments begin generating more revenue.<\/p>\n
Oracle said it expects to turn free cash flow positive in the second half of fiscal 2028 and generate more than $30 billion in free cash flow in fiscal 2029.<\/p>\n
The company also expects to fund its growth internally beginning in fiscal 2029, with net debt falling below 3.5 times adjusted EBITDA that year.<\/p>\n
Oracle stock closed at $119.22 on Nov. 2, down more than 60% from the $323.43 peak it reached in September 2025.<\/p>\n
SOPA Images \/ Getty Images<\/p>\n
Analysts’ thoughts on Oracle stock<\/p>\n
Oracle stock closed at $119.22 on Nov. 2, down more than 60% from the $323.43 peak it reached in September 2025.<\/p>\n
Wall Street analysts are cautiously optimistic about Oracle stock following the recent investor day.<\/p>\n
Scotiabank remains optimistic about Oracle, although it lowered its price target to $205 from $215 on Oct. 29 while maintaining an Outperform rating, The Fly reported.<\/p>\n
Also read: Intel stock plunges 20% as chipmaker warns of tough year ahead<\/p>\n
The firm said Oracle’s major financing overhang was beginning to clear and that the company remained well positioned to benefit from growing demand for AI infrastructure.<\/p>\n
Wells Fargo, meanwhile, lowered its price target to $250 from $280 on Oct. 26 but maintained an Overweight rating.<\/p>\n
The bank said Oracle’s AI opportunity continues to expand, although questions remain about its ability to meet its fiscal 2030 targets.<\/p>\n
Wells Fargo was particularly focused on capital spending, financing requirements and the role of customer-provided hardware and prepayments in supporting future growth.<\/p>\n
Oracle has set an ambitious goal of generating more than $225 billion in annual revenue by fiscal 2030, representing a compound annual growth rate of more than 35% from fiscal 2026.<\/p>\n
The company is also targeting a non-GAAP operating margin above 40% and adjusted earnings of more than $21 per share by fiscal 2030.<\/p>\n
For fiscal 2027, Oracle reaffirmed its outlook for revenue of at least $90 billion and adjusted earnings of $8.10 per share, compared with Wall Street estimates of $90.43 billion and $8.14, respectively.<\/p>\n
Monday’s selloff suggests investors are still weighing the cost of that expansion against its potential payoff.<\/p>\n
More clarity could come on Dec. 14, when Oracle is scheduled to report its fiscal second-quarter earnings.<\/p>\n
Related: Cathie Wood buys $11.2 million of popular AI stock<\/p>\n
#Oracle #stock #sinks #Wall #Street #confronts #billion #problem<\/p>\n","protected":false},"excerpt":{"rendered":"
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