Oracle Corp. shares slipped on Monday following the announcement that the company is planning to raise up to $50 billion this year through a combination of debt and equity sales. This capital will be utilized to expand its cloud infrastructure capabilities.
Oracle is raising these funds to satisfy rising demand from its premier cloud clients, which include major entities such as Advanced Micro Devices Inc., Meta Platforms Inc., Nvidia Corp., OpenAI, TikTok Inc., and xAI Corp., according to a company statement issued on Sunday.
The company has initiated a US dollar bond offering as it seeks to secure between $45 billion and $50 billion in 2026. The debt issuance is structured in up to eight tranches with maturities spanning 3 to 40 years, as reported by Bloomberg.
The preliminary pricing for the 40-year bond suggests a premium of roughly 2.25 percentage points over US Treasuries. To balance the financing, Oracle intends to raise half of the total through equity-linked and common stock sales. This strategy includes mandatory convertible preferred securities and an at-the-market equity program valued at up to $20 billion, Bloomberg reported.
Market Reaction
Following the news, Oracle stock dipped approximately 3% in Monday’s pre-market trading. On Friday, the stock had closed down 2.6% at $164.58.
Oracle’s shares have tumbled nearly 50% from their peak on September 10, 2025, resulting in a loss of about $460 billion in market capitalization (m-cap).
Oracle’s Growing Debt
Oracle’s previous entry into the US bond market occurred in September 2025, when it raised $18 billion in one of the year’s largest deals. That offering has since softened in secondary markets due to anxieties regarding Oracle’s growing debt obligations, which have subsequently increased the cost of credit default swaps.
Goldman Sachs Group Inc. is managing the senior unsecured bond sale, while Citigroup Inc. oversees the at-the-market program and the preferred equity offering.
This move comes amid ongoing market skepticism regarding the profitability of the massive artificial intelligence investments made by tech giants. A cornerstone of Oracle’s expansion is its agreement with OpenAI, which involves a $300 billion commitment to rent server space. However, the aggressive push into AI data centers has driven Oracle’s free cash flow into negative territory, a trend expected to persist until 2030.
