New York, February 5, 2026, 11:17 EST — Regular session.
- Oracle shares dropped roughly 5% in early trading after investors absorbed fresh details on its equity sale plan and a $25 billion debt offering
- These steps tie into Oracle’s larger 2026 funding effort, driven by significant cloud infrastructure investments
- Analysts are focused on dilution risk and if the financing eases an overhang before the upcoming earnings report
Oracle shares dropped 4.9% to $139.54 Thursday morning, following the company’s announcement of a $20 billion stock-sale plan and confirmation that it had completed a $25 billion notes offering.
The drop matters as Oracle works to finance a major data-center expansion without rattling bondholders or shareholders. The key question now: how quickly will the company tap equity, and at what valuation, as it scales up cloud spending?
AI-linked infrastructure trades are also caught in a jittery market. Investors have shown little patience for anything that suggests ongoing capital requirements, even if the revenue potential is solid.
Oracle disclosed in an SEC filing that it launched an “at-the-market” (ATM) program, enabling it to sell shares gradually at current market prices instead of a single lump sum. The company set a cap of $20 billion in total sales proceeds and will pay sales agents commissions up to 0.5% of gross proceeds. Additionally, the filing revealed Oracle completed issuing $25 billion in notes with maturities stretching to 2066. The funds raised are intended for general corporate uses, possibly including capital expenditures, debt repayment, investments, acquisitions, dividends, or buybacks. (SEC)
Oracle signaled earlier this week it aims to pull in $45 billion to $50 billion in gross cash proceeds in calendar 2026, divided roughly between equity and a one-off issuance of investment-grade senior unsecured bonds. The term “investment-grade” refers to borrowers with stronger credit ratings, and Oracle has emphasized its commitment to maintaining that status. (Oracle)
Part of the equity side involves equity-linked funding. Oracle launched a $5 billion mandatory convertible preferred offering, featuring a 6.5% dividend and roughly a 25% conversion premium, according to IFR. A mandatory convertible is a preferred share that pays dividends but will convert into common stock eventually, potentially diluting current shareholders. (Ifre)
On Feb. 3, Scotiabank analyst Pat Colville lowered his price target, noting the capital plan “gives Oracle runway through early F28.” However, he flagged “lingering medium-term financing questions remain,” Insider Monkey reported via Finviz. (Finviz)
UBS analyst Karl Keirstead echoed this view following the company’s disclosures, suggesting the newfound clarity “may serve as a clearing event for the stock.” He also pointed out the risk of dilution, according to a separate repost by Insider Monkey on Finviz. (Finviz)
Oracle is ramping up investment in Oracle Cloud Infrastructure to handle growing demand from major clients and to take on bigger cloud providers in the AI space. That expansion fuels optimism. But the cost of funding it is the immediate challenge.
The risk is clear: faster share sales amid weakness could fuel dilution worries, overshadowing the “funding clarity” angle. On top of that, if capex outpaces cash flow, ratings could come under pressure again, pushing borrowing costs higher.
Investors will be tracking how quickly shares are issued through the ATM program, if Oracle hints at additional equity-linked financing, and how its new bonds perform in secondary trading. The next major milestone is Oracle’s earnings release scheduled for March 9. (Public)
