Updated version 3 - Oracle raises $20 billion from investors for AI business expansion

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Reuters, November 2 - Regulatory filings on Monday showed that Oracle ORCL.N plans to raise $20 billion through bond and stock offerings, as the software giant seeks funding from investors to support its costly investments in artificial intelligence and cloud infrastructure.

The company’s stock price dropped nearly 5%, extending a year-to-date decline of about 33% as of last Friday.

Oracle stated that the proceeds will be used for general corporate purposes, including capital expenditures, debt repayment, acquisitions, dividends, and stock buybacks.

This fundraising highlights the scale of Oracle's investments in artificial intelligence, as the company aims to more than triple its revenue by fiscal 2030. Last week, the company said capital expenditures (link) would peak in both this and the next fiscal year, while pledging to raise up to an additional $20 billion for AI projects by fiscal 2030.

On Wednesday, Chief Financial Officer Hilary Maxson stated that Oracle also expects free cash flow to turn positive in the second half of fiscal 2028, boosting the company’s stock, which rose about 11% on the news.

As of August 31, Oracle’s total notes payable and other borrowings stood at $125.34 billion, while fiscal 2026 revenue was $67.36 billion. The company expects revenue to exceed $225 billion and adjusted earnings per share to surpass $21 in fiscal 2030.

According to data compiled by London Stock Exchange Group (LSEG), Wall Street expects the company’s adjusted profit per share in fiscal 2027 to be $8.14.

This bond offering includes six tranches maturing between 2029 and 2046, comprising one floating-rate bond and five fixed-rate bonds. Interest rates, pricing, and issuance size have not yet been determined.

Investors are closely watching Oracle’s spending in AI because the company lacks the revenue scale of cloud competitors like Microsoft and Amazon, and is closely linked to loss-making ChatGPT developer OpenAI.

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