Oracle plans $70B AI infrastructure buildout as investors flee, sending stock down 12%
10 Sources
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Oracle's AI datacenter splurge gives investors the capex jitters
Q4 sales climbed 21%, but Wall Street more interested in $70B buildout bill Oracle has lifted capital spending plans above analyst estimates and expanded borrowing to chase the opportunity it says exists in building datacenters for AI workloads. Despite revenue for Q4 (ended May 31) rising 21
[2]
Oracle spent $55.7B on data centres, plans to raise $40B more
Oracle spent $55.7 billion on data centres in FY2026, overshooting its own $50 billion guidance. Revenue and cloud bookings beat estimates, but the stock fell 7% after hours on capex concerns and plans to raise another $40 billion. Oracle reported fiscal fourth-quarter revenue of $19.2 billion, up
[3]
Investors Don't Like Oracle's AI Spending Plans -- And the Stock Is in the Red for the Year
Get personalized, AI-powered answers built on 27+ years of trusted expertise. Earlier this month, Oracle's shares were at 2026 highs. But they've dropped more recently as tech shares have retreated -- and the company's latest results aren't helping. Shares of Oracle (ORCL) were down 11% in recent
[4]
Oracle shares tumbles 12% as hefty AI spending, debt plans spook investors
Oracle faced a sharp decline in stock prices on Thursday, triggering alarms among investors who are anxious about the company's escalating debt and spending in the competitive AI infrastructure sector. Engaging in large-scale data center partnerships with industry titans like OpenAI and Meta,
[5]
Oracle Wants To Spend Big For AI, Stock Drops - Oracle (NYSE:ORCL)
The tech giant's shares dipped following the disclosure that fiscal year 2027 net capital expenditures are projected to climb to around $70 billion to fuel massive AI demand. Earnings Highlights Oracle reported revenue of around $19.18 billion, beating estimates of approximately $19.10 billion,
[6]
Oracle Q4 Earnings: Cloud, AI Surge As Spending Spikes
'Our customers have moved past the experiment stage with AI,' says Oracle co-CEO Mike Sicilia. Demand for artificial intelligence and compute pushed Oracle to new revenue milestones in its latest fiscal quarter and year -- although continued eye-popping spending to meet AI demand continues to give
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Explained: Why Oracle shares crashed 10% in extended trading despite earnings beat
Oracle shares fell sharply in after-hours trading despite beating earnings estimates, as investors reacted to aggressive AI spending plans and rising debt concerns. The company's massive capital raise and infrastructure push raised fears of over-leverage, even as strong revenue growth and bullish
[8]
Oracle slides as hefty AI spending, debt plans spook investors
Shares of Oracle slid on Thursday after the cloud giant's higher-than-expected capital spending plans fuelled concerns over soaring AI data centre costs, overshadowing strong quarterly results. Shares of the Austin, Texas-based company fell 7.2 per cent to US$186.70 in premarket trading and were
[9]
Oracle Goes All Out
If some still doubted AI, which may be fueling an extraordinary speculative bubble lately, particularly amongst equipment manufacturers, the desire of major American names to raise capital, something they haven't done in decades, and to bet big on the technology should finally convert
[10]
Oracle shares plunge as soaring AI spending rattles investors
STORY: Oracle shares plunged in after-hours trade Wednesday, dropping close to 9%. :: Oracle The dive came after the tech firm said its spending on AI would blow past estimates. It also said it would have to raise more debt next year, reflecting the staggering sums of money being put into AI
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Oracle reported strong Q4 earnings with revenue up 21% to $19.2 billion, but investor concerns over massive AI datacenter spending sent shares tumbling 12%. The company plans to spend $70 billion on AI infrastructure in fiscal 2027 and raise $40 billion through debt and equity financing, marking one of tech's most aggressive AI buildouts.
Oracle Stock Drop Follows Massive AI Spending Announcement
Oracle shares plummeted 12% on Thursday, wiping out approximately $72 billion in market value, after the company disclosed plans to spend $70 billion on AI infrastructure in fiscal 2027
4
. The decline came despite Oracle beating analyst estimates with Q4 revenue of $19.2 billion, up 21% year-over-year, and adjusted earnings of $2.11 per share2
. Investor concerns centered on how Oracle would fund its aggressive AI datacenter investments without the massive cash flows that rivals Amazon and Microsoft enjoy4
.
Source: Benzinga
Record Capital Expenditure Overshoots Guidance
Oracle capital expenditure for fiscal 2026 reached $55.7 billion, significantly exceeding the company's own $50 billion guidance
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. CFO Hilary Maxson told investors that Oracle plans to raise approximately $40 billion in debt and equity financing during fiscal 2027, including a previously announced $20 billion equity issuance. This follows $43 billion in debt financing and $5 billion in equity raised in fiscal 20262
. The heavy AI spending pushed Oracle's free cash flow deficit to $23.7 billion, a dramatic increase from just $394 million in fiscal 20254
.Cloud Infrastructure Revenue Surges on AI Demand
Cloud infrastructure revenue grew 93% to $5.8 billion in Q4, driven by AI workloads and database services
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. Oracle Cloud Infrastructure revenue for the full fiscal year hit $18.1 billion, up 77%2
. The company added approximately 400 MW of capacity in Q4 and expects to add nearly 1 GW of capacity in fiscal Q1 2027. Multi-cloud revenue jumped 404% while multi-cloud bookings climbed 325% year-over-year5
.
Source: The Register
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Record Backlog Fueled by OpenAI and Large AI Contracts
Remaining performance obligations reached a record $638 billion, up 363% year-over-year and well above the $589.5 billion analysts expected
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. Oracle signed $67 billion in AI infrastructure contracts during the quarter, with four customers each contracting for more than $8 billion5
. The backlog reportedly includes $300 billion for OpenAI alone. Prepaid and customer-supplied hardware portions of large AI contracts now total $75 billion2
. Co-CEO Clay Magouyrk said Oracle's large datacenters for OpenAI are seeing "significant progress," with 42% of capacity delivered at the flagship Stargate site in Abilene, Texas2
.Funding Questions Persist Despite Strong Bookings
Oracle now has approximately $117 billion of debt in the Bloomberg US high-grade corporate bond index, making it the largest issuer outside the financial sector
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. One analyst told Reuters that while real AI demand exists, the question of how Oracle funds its AI datacenter investments "is getting harder, not easier, with capex coming in well above estimates and free cash flow still negative". Citizens JMP Securities noted that "Oracle's accelerated data center buildout is pressuring near-term gross margins and raising investor questions around CapEx, funding, and returns"4
. The $638 billion backlog represents contracted revenue, not recognized earnings, with only 12% expected to convert within 12 months and 34% within three years2
. Whether AI demand sustains at levels justifying $70 billion in annual spending remains uncertain, particularly as Oracle competes against well-funded rivals like Amazon and Microsoft while also facing competition from specialized AI cloud providers such as CoreWeave4
. Morgan Stanley expects AI-related global debt issuance to more than double to nearly $570 billion in 2026, with hyperscaler spending exceeding $1 trillion by 20274
. Oracle also cut up to 30,000 employees beginning in March, approximately 18% of its global workforce, with TD Cowen estimating the layoffs will free up $8 billion to $10 billion in annual cash flow for AI infrastructure2
. Despite investor concerns, William Blair analysts wrote that "we continue to view Oracle as a long-term AI beneficiary," though they acknowledged "the near-term elevated capital intensity as the company rushes to bring capacity online remains a key investor concern"3
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Source: BNN
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