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Oracle Capped Its AI Funding at $20 Billion and Rose 11%
Oracle said on Wednesday it will raise no more than $20 billion of new outside funding through fiscal 2030 to pay for its AI data centres. The shares rose 10.7% to $144.54, their biggest gain since May.
Oracle's investor day on Wednesday, October 28, did not raise its long-term targets. It kept them, and added a limit. The company again said it expects at least $225 billion of revenue in fiscal 2030, a non-GAAP operating margin of at least 40% and non-GAAP earnings of at least $21 a share, the same figures it gave in October 2025, now described as minimums. What was new was a cap: Oracle will raise no more than $20 billion of new capital from fiscal 2027 through 2030, excluding refinancing, roughly half in shares and half in debt, InvestingLive reported. That comes on top of a $20 billion at-the-market share sale already completed in the first quarter of fiscal 2027.
The cap is an answer to the question that had cut the stock in half. Oracle is building data centres for AI customers, and its remaining performance obligations, the contracted revenue it has yet to deliver, reached $664 billion at the end of August. Delivering that backlog has required capital spending far above its cash flow: free cash flow was about minus $5 billion in the last reported quarter. Its credit rating had already been cut to BBB-, one notch above junk, and investors had worried that the gap would be filled with ever more debt and new shares.
The investor day put dates on the turn. Capital spending is expected to peak in fiscal 2027 and 2028 and then decline, free cash flow to turn positive in the second half of fiscal 2028 and reach at least $30 billion in fiscal 2029, and net debt to fall below 3.5 times adjusted EBITDA in fiscal 2029. Guidance for fiscal 2027, revenue of at least $90 billion and non-GAAP earnings of $8.10 a share, was reaffirmed.
The shares rose 10.73% to $144.54, on about 80 million shares, roughly 2.6 times the three-month average, The Motley Fool reported, the largest one-day gain since May. Before Wednesday the stock was down about 60% from its previous investor day and about 50% over twelve months. Investors appear to have valued a ceiling on dilution and debt more than any new growth promise: on the same evening, Alphabet fell about 9% after hours on negative free cash flow, and Microsoft rose on positive cash flow.
The plan still depends on others. Much of Oracle's backlog comes from a small number of AI developers whose own spending is funded by investors and lenders, and the cap holds only if those customers keep paying on schedule, and if prepayment or bring-your-own-hardware arrangements, which Oracle said in September funded most of its new contracts, keep covering the gap. The second half of fiscal 2028 is now the date to check.
Sources: InvestingLive — Oracle jumps around 11% on $225bn 2030 revenue goal and $20bn cap on new funding (Oct 28, 2026); The Motley Fool — Stock Market Today, Oct. 28: Oracle surges on fiscal 2030 revenue guidance; CNBC — Oracle stock pops on forecast for 35% average growth through 2030 (Oct 28, 2026); ERP Today — Oracle's $664 billion backlog comes with a new financing model