Oracle raises $20 billion to fund AI and cloud expansion
Key Facts
Oracle said on November 2 that it would raise $20 billion through stock and bond sales to fund its expansion of AI and cloud infrastructure, according to Reuters. The announcement came in a session in which the shares closed at $119.22, according to EL7 data. The stock offering is expected to raise about $10 billion, while the debt offering targets about $10 billion more. The financing combines common stock and bonds; it is not solely a share offering. The company said proceeds would be used for general corporate purposes, including capital expenditures, debt repayment, future investments or acquisitions, dividends and share repurchases.
Oracle set the price of 86,206,897 common shares at $116 per share, according to the company’s statement published via PR Newswire. The offering price is below the share price at the close of the same session, $119.22. The debt portion is divided into five tranches maturing in 2029, 2031, 2033, 2037 and 2046. The first tranche is worth $2 billion and carries annual interest of 7%, followed by a $1.75 billion tranche at 7.45%. The other tranches are $2.25 billion at 7.85%, $2.5 billion at 8% and $1.5 billion at 8.65%.
The bonds mature between 2029 and 2046, spreading debt repayments over an extended period, while annual interest rates range from 7% to 8.65%. Reuters reported that the stock and debt proceeds each amount to about $10 billion. The company did not specify a particular use for each part of the financing in its statement, but listed capital expenditures, debt repayment, acquisitions, investments, dividends and share repurchases among its general corporate purposes. Reuters linked the fundraising to the expansion of AI and cloud infrastructure. These details set out the size of the financing alongside its components and debt terms, while the stated purposes reflect the range of potential uses for the proceeds.
The financing comes days after Oracle’s investor day, held on October 28. The company said then that it expected revenue of at least $90 billion and non-GAAP earnings per share of $8.10 in fiscal 2027. It also set a fiscal 2030 revenue target of more than $225 billion and aimed for free cash flow of at least $30 billion in fiscal 2029. As part of its outlook for the FY27-to-FY30 financial cycle, Oracle said additional capital markets funding, excluding refinancing of existing debt, would be limited to $20 billion, split between $10 billion in equity and $10 billion in gross debt. This framework places the November 2 announcement within a multi-year financing and growth plan the company presented days earlier.
Oracle linked its transition to positive free cash flow to its capital spending trajectory, saying spending would peak in fiscal years FY27 and FY28 and then decline in FY29. The company expects positive free cash flow of at least $30 billion in FY29 and said growth would be self-funded starting in that fiscal year. It also targets a net debt-to-adjusted EBITDA ratio of less than 3.5 times in FY29. Oracle added that supplier financing, customer-provided equipment and customer prepayments would help reduce upfront cash requirements during the transition to positive free cash flow. These targets define the financial context the company presented for funding its expansion over the coming years.
Oracle’s announcement comes amid a broader wave of financing among major cloud computing companies. Axios reported on October 29, citing data compiled by S&P Global Market Intelligence, that Oracle and four other companies had raised $326 billion in stock and bonds from the start of 2026 through that date. That total was more than three times what the same companies raised during 2025, which Axios described as a record year. The group included Alphabet, Amazon, Meta and Microsoft alongside Oracle, amid competition to expand AI businesses. This places Oracle’s November 2 financing within broader issuance activity among companies seeking to strengthen their positions in the sector.
Oracle expects the stock and bond offerings to close on November 4, 2026, subject to customary closing conditions, according to its statement. The company said completion of either offering is not contingent on completion of the other. That means each issuance has an independent closing process under the terms the company announced. The financing combines common stock with debt tranches carrying specified maturities and interest rates. The expected date follows the financing announcement on November 2, while the closing conditions mark the next step disclosed in the process.