NEW YORK, July 19, 2026, 17:06 EDT. U.S. markets have closed.
- Oracle shares rose 1.77% on Friday to close at $126.41, though the stock ended the week lower by 10.1%.
- Capital expenditure for fiscal 2026 came to $55.7 billion, while operating cash flow totaled $32.0 billion.
- Oracle’s remaining performance obligations totaled $638 billion. On July 9, S&P lowered Oracle’s rating to BBB-.
Oracle closed Friday at $126.41, rebounding from a new 52-week low of $121.50. Despite the late recovery, shares ended the week down 10.1%. The S&P 500 dropped 1.01% Friday.
Oracle ended the session 63.4% under its record high set in September. Trading volume on Friday was higher than its 50-day average.
Demand is still robust. Cash conversion has declined.
The fiscal-year comparison is prompting investors to view backlog with increased caution.
| $ billions, except percentages | FY2025 | FY2026 | Change |
|---|---|---|---|
| Revenue | 57.4 | 67.4 | up 17% |
| Remaining performance obligations | 138.0 | 638.0 | up 363% |
| Operating cash flow | 20.8 | 32.0 | up 54% |
| Capital spending | 21.2 | 55.7 | up 162% |
| Free cash flow | -0.4 | -23.7 | Deficit increased by $23.3 billion |
For the years ending May 31. Data rounded and provided by Oracle.
Capital expenditures amounted to roughly 83% of yearly revenue and stood at 1.74 times operating cash flow. This difference resulted in a free cash flow shortfall of $23.7 billion.
Oracle reported a net capital cash outlay of $47.7 billion on its supplemental metric. Financing activities and eligible customer advance payments lowered this figure by $7.9 billion. Despite this, the outlay still surpassed operating cash flow by $15.7 billion.
Backlog reflects future demand. Remaining performance obligations were 9.5 times the revenue for fiscal 2026. Cloud infrastructure sales for the fourth quarter increased 93% to $5.8 billion.
Oracle reported that $75 billion worth of hardware connected to major AI contracts was either prepaid or provided by customers. The arrangement reduces capital requirements for building data centres.
The broader funding package is still significant. Oracle secured $43 billion in debt financing and $5 billion in equity in fiscal 2026 and anticipates raising approximately $40 billion more in funding during this year.
The plan incorporates a $20 billion at-the-market equity program, which was previously announced. Oracle stated it does not anticipate any further debt offerings during calendar 2026.
S&P Global Ratings, a segment of S&P Global NYSE:SPGI, has downgraded Oracle’s long-term rating to BBB-. The outlook is stable. S&P points to increased business risk and softer cash flow as reasons.
BBB- is a single level above speculative grade. Tyler Richey, a technical analyst at Sevens Report Research, described the downgrade as a “canary in the coal mine.” According to him, credit markets signaled concerns before Oracle’s shares reacted. Business Insider
Oracle maintains a strong operating outlook, forecasting fiscal 2027 revenue at $90 billion. The company projects first-quarter cloud revenue growth between 58% and 64% in dollar terms. These numbers reflect company guidance, not early results.
Trading begins again Monday at 9:30 a.m. EDT. Oracle’s investor calendar currently shows no scheduled company events. The company’s announced 50-cent dividend is set for Friday, July 24.
Risks: Accelerated contract activations and a rise in customer-funded equipment may help reduce the cash gap. Delays in construction, subpar contract outcomes, ratings downgrades, or share sales could drive the stock down.
Backlog is no longer sufficient for investors. For the next rerating, AI-related cash inflows must match capital expenditure.
