![](\"https:\/\/www.thestreet.com\/.image\/c_fit%2Ch_800%2Cw_1200\/NDA6MDAwMDAwMDAyOTI1MTU2\/oracle-stock-getty-images-03282026.jpg\")
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Oracle stock has been volatile in recent months. Shares of the cloud titan rose from $85 in January 2023 to an all-time high of $346 in September 2025.<\/p>\n
Down 58% from all-time highs, Oracle (ORCL) stock is currently valued at a market cap of $411 billion and trades at $139. \u00a0<\/p>\n
While ORCL is under pressure, its revenue is growing faster than it has in over 15 years.<\/p>\n
Artificial intelligence contracts are piling up. And Wall Street is paying close attention.<\/p>\n
But there’s a number that income investors can’t ignore: Free cash flow has gone from a modest positive to deeply, alarmingly negative, all in the span of two years.<\/p>\n
So what does that mean for Oracle as a dividend stock? And should shareholders be worried?<\/p>\n
Is ORCL’s stock dividend under threat?<\/p>\n
To understand the pressure on Oracle’s dividend, you have to understand what the company is building.<\/p>\n
“Demand for AI infrastructure, both GPU and CPU, continues to exceed supply,” Oracle CEO Clay Magouyrk told analysts on the company’s fiscal third-quarter 2026 earnings call. “This is directly visible in our $553 billion RPO.”<\/p>\n
Oracle has secured more than 10 gigawatts of power and data center capacity coming online over the next three years. <\/p>\n
The company also tripled its manufacturing sites and increased rack output fourfold, all within a single year.<\/p>\n
Related: Bank of America sends stark Oracle stock message to investors<\/p>\n
That kind of build-out costs serious money.<\/p>\n
Capital expenditure totaled $21.22 billion in fiscal year 2025. Analysts now expect that figure to balloon to $50.64 billion in FY26, a 138.7% jump in a single year. CapEx is projected to reach $62.42 billion in FY27 and $73.30 billion in FY28.<\/p>\n
The result? Free cash flow has collapsed. <\/p>\n
Oracle generated roughly $11.8 billion in free cash flow in FY24.That figure flipped to -$0.4 billion in FY25 and is projected to deteriorate further to -$23.28 billion in FY26 and -$27.63 billion in FY27.<\/p>\n
To fund its AI investments, Oracle raised$30 billion through investment-grade bonds and convertible preferred stock in February 2026, part of a broader plan to raise to $50 billion in debt and equity this calendar year.<\/p>\n
That’s a lot of debt for a company that also pays a dividend to shareholders.<\/p>\n
Oracle’s $5.75 billion dividend expense <\/p>\n
Oracle pays an annual dividend of $2 per share, per MarketBeat. With the stock trading at $139.66 and a market cap of $411 billion, the total annual dividend expense works out to roughly $5.75 billion.<\/p>\n
Notably, ORCL stock has increased its annual dividend from $0.24 per share in 2014 to $2 per share in 2026. However, this growth was in the pre-AI era.\u00a0<\/p>\n
Key dividend metrics for Oracle stock investors:Annual dividend per share: $2.00Dividend yield: Approximately 1.43% (based on $139.66 share price)Annual dividend expense: Approximately $5.75 billionProjected free cash flow (FY26): -$23.28 billionProjected free cash flow (FY27): -$27.63 billionLong-term debt (LTM): $124.7 billionTotal liabilities (LTM): $206.2 billionCash and equivalents (LTM): $39.1 billionCash from operations (FY26 estimate): $25.68 billion<\/p>\n
When free cash flow is deeply negative, dividends must be funded through debt, asset sales, or cash reserves, none of which is a sustainable long-term strategy.<\/p>\n
Oracle is betting big on AI.<\/p>\n
Anna Moneymaker / Getty Images<\/p>\n
Oracle’s dividend could survive the cash burn<\/p>\n
Oracle’s cash from operations is growing from $20.82 billion in FY25 to an estimated $25.68 billion in FY26 and $36.92 billion in FY27. <\/p>\n
The free cash flow deficit is entirely driven by the CapEx surge, not by a deteriorating business.<\/p>\n
More on dividend stocks:How much to invest in Ford stock for $1,000 in 2026 dividends189-year-old dividend stock offers 19% upside in March 2026Semiconductor dividend stock shows 40 percent upside as AI demand up<\/p>\n
On the earnings call, Magouyrk said AI data centers are already generating gross margins above 30%, and that more than 90% of committed capacity is being delivered on or ahead of schedule.\u00a0<\/p>\n
When you layer in Oracle’s higher-margin database and software businesses, the overall margin picture looks even better.<\/p>\n
Meanwhile, earnings per share (GAAP) are projected to grow from $4.34 in FY25 to $5.85 in FY26 and $16.31 in FY2030, a 30.4% CAGR through 2030.\u00a0<\/p>\n
The $5.75 billion annual dividend bill is also relatively small compared to projected operating cash flows, and management appears committed to maintaining it.<\/p>\n
Still, this is a dividend stock carrying $124.7 billion in long-term debt and burning through cash at a historic pace. Oracle has bet its balance sheet on AI. If demand holds, the payoff could be enormous.<\/p>\n
But income investors should go in with eyes open. Oracle is not a sleepy dividend stock right now. <\/p>\n
It’s a high-stakes growth play that also pays a dividend. The two can coexist, but the margin for error has gotten a lot thinner.<\/p>\n
Related: Oracle dividend growth signals new era for cloud titan<\/p>\n
#Oracle #stock #dividend #threat #massive #push<\/p>\n","protected":false},"excerpt":{"rendered":"
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