New York, Feb 4, 2026, 10:44 EST — Regular session
- Oracle shares slipped roughly 2% in early trading
- Company announces plans for a $25 billion bond offering alongside a new $20 billion at-the-market share program
- Oracle’s move to expand its AI-driven cloud comes with investor concerns over dilution and rising debt
Oracle shares dropped 1.9%, slipping to $151.71 in Wednesday morning trading. The decline comes amid investor caution over a new fundraising effort linked to the company’s push into cloud services.
This move is crucial as Oracle aims to secure funding for a sharp rise in capital spending — the costs tied to data centers, servers, and networking equipment — at a time when markets are growing more skeptical about the speed of returns on AI investments.
Software stocks are also facing turbulence. Traders worry that emerging AI tools might undercut subscription software pricing, hitting even the biggest players with strong customer relationships.
On Monday, Oracle priced a $25 billion investment-grade note offering across eight tranches, maturing between 2029 and 2066. The deal includes $500 million in floating-rate notes tied to SOFR — a key benchmark for U.S. markets — along with fixed-rate notes carrying coupons from 4.55% up to 6.85%, according to a filing. Settlement is scheduled for Feb. 4. (Securities and Exchange Commission)
At the same time, Oracle submitted a filing for an “at-the-market” offering program, allowing it to gradually sell up to $20 billion in common stock. The sales will be handled by a syndicate of banks including BofA Securities, Citi, Deutsche Bank, Goldman Sachs, and J.P. Morgan, per a prospectus supplement. (Securities and Exchange Commission)
Oracle is pushing ahead with a mandatory convertible preferred offering, planning to issue 100 million depositary shares at $50 apiece, according to a term sheet included in a recent securities filing. (Streetinsider)
The company plans to raise between $45 billion and $50 billion in 2026, roughly half through equity and half through debt, to support growth in Oracle Cloud Infrastructure. It indicated a single senior unsecured bond issuance, with no further bond sales planned. On the equity front, it will use an at-the-market share program along with an initial mandatory convertible preferred issuance.
Earlier this week, some analysts suggested the structure shields Oracle’s credit rating, even if shareholders face dilution. Russ Mould, investment director at AJ Bell, described the plan as “not interested in stressing its balance sheet indefinitely.” (Reuters)
The wider market hasn’t provided much support. Nvidia CEO Jensen Huang dismissed worries that AI will render software tools obsolete, calling the notion “illogical” on Wednesday. This came amid a selloff in global software stocks driven by fears over the swift progress of AI agents and automation. (Reuters)
Oracle pointed to demand from major clients like AMD, Meta, Nvidia, OpenAI, TikTok, and xAI as the key driver behind its capacity expansion. The sheer size of the funding request has raised red flags on leverage and transparency. Reuters reported that bondholders linked to the company’s debt needs filed a lawsuit back in January. (Reuters)
Certain credit investors are zeroing in on Oracle’s move to combine debt with equity. George Catrambone, head of fixed income for the Americas at DWS Group, called it “a much-needed signal to the market.” (DataCenterDynamics)
But the math isn’t straightforward. The Financial Times noted Oracle’s bond sale saw strong demand, but the company is paying a premium for long-term debt and still grappling with scrutiny over how quickly AI-driven cloud revenue will grow relative to expenses. (Financial Times)
Traders are now focused on the Feb. 4 settlement of the bond sale, along with any follow-up filings revealing how fast Oracle moves through the share-sale program and the upcoming preferred stock issuance.
