New York, February 2, 2026, 10:55 EST — Regular session
- Oracle shares gained roughly 2.2% by mid-morning trading
- The company aims to raise $45-$50 billion by 2026 for cloud capacity, through a mix of equity and a one-time bond issuance
- Investors are focused on the preferred offering’s terms, the risk of share dilution, and the timing of the next earnings report
Oracle (ORCL) shares climbed $3.65, roughly 2.2%, hitting $168.23 by mid-morning Monday following the company’s announcement of a new funding strategy to boost its cloud growth.
Oracle aims to raise between $45 billion and $50 billion in gross cash during calendar 2026 to boost its cloud infrastructure capacity. This expansion will support clients like OpenAI, Meta Platforms, NVIDIA, Advanced Micro Devices, TikTok, and xAI. The company plans to split the funding through equity, including an at-the-market program that could sell up to $20 billion in shares over time, alongside a single issuance of investment-grade senior unsecured bonds. Goldman Sachs is set to lead the bond sale, while Citigroup will head the equity and preferred stock offering, Oracle said. (Oracle Investor Relations)
The plan arrives amid growing doubts about how much further tech firms can ramp up spending on AI data centers without hurting cash flow. Oracle is under the microscope as its debt load rises and its fortunes become increasingly linked to loss-making OpenAI, which hasn’t clarified how it will fund its own infrastructure expansion. In January, bondholders sued Oracle, accusing the company of hiding its need to issue a large amount of new debt. Meanwhile, the cost to insure Oracle’s debt against default hit its highest level in at least five years last December. (Reuters)
Guggenheim Securities analysts said the plan sent a “clear message” to rating agencies and bond investors. Barclays noted that the extra equity and mandatory convertible should cut the need for debt and bolster the balance sheet. Russ Mould at AJ Bell pointed out Oracle’s fortunes are “heavily tied to OpenAI” and that jitters aren’t likely to subside soon. Oracle’s credit-default swaps — essentially default insurance contracts — narrowed about 35 basis points, or 0.35 percentage points, according to Markit data. The company also announced it had filed for an offering of 100 million depositary shares. (CNA)
Oracle disclosed in a U.S. Securities and Exchange Commission filing that the agreement involves 100 million depositary shares, each representing a 1/2,000th interest in Series D mandatory convertible preferred stock. The company intends to list these depositary shares on the New York Stock Exchange under the ticker ORCL-PRD. Conversion into common shares is expected to be mandatory by 2029. These mandatory convertibles start as preferred stock but convert into common stock later, potentially increasing the number of shares outstanding and diluting current shareholders. (SEC)
Oracle’s latest financing push highlights its aggressive bet on cloud infrastructure as it aims to catch up with the heavyweights. Amazon Web Services and Microsoft still lead the global IaaS public cloud market in 2024, according to Gartner. IaaS stands for infrastructure-as-a-service, essentially rented computing power and storage. (Gartner)
But the fundraising plan isn’t without its downsides. Big equity sales might dilute existing shareholders, while an aggressive expansion could squeeze margins if customers hesitate or projects get delayed.
Traders are keeping an eye on how fast Oracle draws from its at-the-market program and the terms it sets for the preferred securities. They’ll also be watching demand for the one-off bond issue planned later this year. Any hiccup in the credit market or a sluggish pace in launching new capacity could weigh on the stock initially.
Oracle is set to release its fiscal third-quarter results in mid-March 2026, according to the company’s investor-relations FAQ. Investors will be watching closely for any updates on spending and clues about when free cash flow might return to positive territory. (Oracle Investor Relations)
