New York, Feb 3, 2026, 17:48 ET — After-hours
- Oracle shares dropped 3.4% after investors digested new debt and equity financing aimed at expanding its cloud infrastructure.
- This week’s filings reveal plans for a $25 billion bond sale and a $5 billion mandatory convertible preferred offering, plus a $20 billion at-the-market stock program.
- Settlement of the notes is scheduled for Feb. 4, followed by the preferred depositary shares on Feb. 5.
Oracle shares slipped 3.4% to close at $154.67 on Tuesday, hitting a low of $151.92 earlier in the session amid a flood of financing filings and a negative mood in large-cap tech stocks. Trading volume reached roughly 40.6 million shares.
On Feb. 1, the company announced plans to raise between $45 billion and $50 billion in 2026. About half of that will come from equity and equity-linked securities, with the remainder from debt. The funds aim to boost Oracle Cloud Infrastructure capacity for clients like Advanced Micro Devices, Meta Platforms, Nvidia, OpenAI, TikTok, and xAI. The strategy includes a newly authorized at-the-market program that could sell up to $20 billion in shares over time, plus an initial mandatory convertible preferred offering. Goldman Sachs will lead the bond deal, while Citigroup heads the equity-linked portion, the company said.
This matters now because the financing setup ties dilution, leverage, and credit ratings directly to Oracle’s AI-driven cloud expansion. Should the cloud push succeed, investors might overlook additional supply. But if it falters, new shares often stick around longer.
Oracle revealed a $25 billion senior unsecured notes offering in a Feb. 2 prospectus supplement, split across eight tranches. Maturities stretch from 2029 to 2066, with coupons climbing to 6.85% on the longest-dated bonds. Included is a $500 million floating-rate tranche tied to compounded SOFR plus 1.11%. The notes are set to settle Feb. 4.
The final pricing term sheet filed with the U.S. Securities and Exchange Commission lists the notes’ anticipated ratings as Baa2 (negative) from Moody’s, BBB (negative) from S&P Global Ratings, and BBB (stable) from Fitch Ratings. The trade date was Feb. 2, with settlement set for Feb. 4.
Oracle priced 100 million depositary shares at $50 each, linked to its 6.50% Series D mandatory convertible preferred stock, according to a pricing term sheet. The deal is set to settle on Feb. 5. Net proceeds should hit about $4.95 billion. The conversion terms set a “threshold” price near $200.07 — about 25% above the initial reference price of $160.06 — before holders face fewer shares upon conversion. StreetInsider.com
Earlier this week, analysts suggested the blend of equity and debt aims to calm jitters over the balance sheet and the expenses tied to new data centers. Russ Mould from AJ Bell noted, “Nervousness about the situation looks unlikely to go away any time soon.” Reuters
Not everyone is convinced, though. Scotiabank lowered its price target to $220 from $250, maintaining a “sector perform” rating. The bank cited uncertainties around the capital plan and Oracle’s OpenAI-related expansion as key concerns. Investing.com India
Tuesday’s broad selloff hit the sector hard after Anthropic introduced AI tools that allow models to interact with external apps, fueling ongoing debate over weakening software moats. “Sometimes the market just shoots first and asks questions later,” said Mike Archibald of AGF Investments. Jonathan McMullan at Schroders noted investors are repricing software stocks as the “visibility premium” fades. The Nasdaq dropped 2.9%, while the S&P 500 slid about 2%. Reuters
Oracle bulls face a mechanical risk: fresh issuance might weigh on the stock. The company cautioned that hedging and short-selling linked to the mandatory convertible preferred shares could add pressure to its common stock or magnify volatility. More fundamentally, the key issue remains whether AI-driven demand will hold up long enough to support this spending pace amid persistently high funding costs.
Traders have their eyes on two key dates: the bond deal’s settlement on Wednesday (Feb. 4) and the preferred depositary shares clearing on Thursday (Feb. 5). Once those are done, Oracle’s $20 billion at-the-market program kicks off, injecting fresh volatility into the next trading session and the week beyond.
