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.
The company filed with the Securities and Exchange Commission to sell $10 billion in common stock and issue another $10 billion in senior notes.
The announcement renewed concerns about how Oracle will finance its AI expansion and whether those investments will pay off.
Oracle lays out $20 billion financing plan
Oracle has been spending heavily to expand its cloud infrastructure as demand for AI computing capacity grows.
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.
Also read: Non-AI stock surges 20% after earnings beat and raised outlook
Building that business requires substantial investment in data centers, servers and networking equipment.
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.
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.
Monday’s filing outlined offerings matching those amounts.
The stock sale could dilute existing shareholders, while issuing more debt would add to Oracle’s borrowing obligations.
Still, management expects its financial position to improve as investments begin generating more revenue.
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.
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.
Analysts’ thoughts on Oracle stock
Oracle stock closed at $119.22 on Nov. 2, down more than 60% from the $323.43 peak it reached in September 2025.
Wall Street analysts are cautiously optimistic about Oracle stock following the recent investor day.
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.
Also read: Intel stock plunges 20% as chipmaker warns of tough year ahead
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.
Wells Fargo, meanwhile, lowered its price target to $250 from $280 on Oct. 26 but maintained an Overweight rating.
The bank said Oracle’s AI opportunity continues to expand, although questions remain about its ability to meet its fiscal 2030 targets.
Wells Fargo was particularly focused on capital spending, financing requirements and the role of customer-provided hardware and prepayments in supporting future growth.
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.
The company is also targeting a non-GAAP operating margin above 40% and adjusted earnings of more than $21 per share by fiscal 2030.
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.
Monday’s selloff suggests investors are still weighing the cost of that expansion against its potential payoff.
More clarity could come on Dec. 14, when Oracle is scheduled to report its fiscal second-quarter earnings.
Related: Cathie Wood buys $11.2 million of popular AI stock