Oracle files to sell $10 billion in stock and $10 billion in notes for AI buildout

Oracle filed plans on Monday to issue new stock and more debt to finance its artificial intelligence buildout. According to filings with the Securities and Exchange Commission, the company will sell $10 billion in common stock and $10 billion in senior notes.

Oracle said it plans to use the proceeds for general corporate purposes, which may include capital expenditures, repayments of debt and future investments. The fundraising had already been outlined at an investor day last week, but shares still fell 8.8% on Monday.

At that investor day, held last Wednesday, Oracle issued a revenue forecast of at least $225 billion for fiscal 2030. It also said it was limiting additional capital market funding for the fiscal 2027 to 2030 investment cycle to the $20 billion. The stock initially bounced after the event.

Oracle's stock and bonds have been under pressure amid investor concerns about the amount of debt being taken on to fund AI infrastructure. Shares are down 33% in 2026 and 50% over the past 12 months. The yield on its investment-grade 4.95% bond due in 2031 is 7.276%.

Credit markets show similar strain. Oracle's five-year credit default swap spread sits at 292, up 265% in one year, which S&P Global Market Intelligence's Gavan Nolan said is more in line with a high-end junk bond rating. S&P downgraded Oracle to BBB- in July, one level above high yield. Debt stood at $125.34 billion as of Aug. 31, mostly senior notes.

Analysts were split on the reaction. UBS analyst Karl Keirstead called the funding cap a major relief in a Thursday note. Baird's Rob Oliver said the filing was what the company had previewed and questioned the market's reaction. The sell-off may reflect dilution and continued leverage concerns, though the coverage does not say so directly.

Oracle plans to rely on vendor financing, customer-provided hardware and customer prepayments to reach positive free cash flow, which it expects in the second half of 2028. Whether those sources materialize is a key test of the plan.

Pat Nerney of Dynasty Financial Partners said execution is what ultimately matters, and warned that if Oracle has to return to market in the back half of 2027 after calling this the last capital needed, investors should look out.