Oracle shares fall 12% on $70B AI CapEx plan and $40B funding raise
ORCL•Oracle shares tumbled 12% after unveiling plans for $70 billion in AI data center capital expenditure and raising $40 billion through debt and equity, deepening a free cash flow deficit to $23.7 billion in fiscal 2026. The spending surge wiped $72 billion off its $578.8 billion valuation.
1. Shares Plunge on AI Spending
Oracle shares dropped 12% in a single session, marking their steepest decline since January last year and erasing about $72 billion from the company’s $578.8 billion market valuation.
2. AI Data Center Expansion Plans
The company plans to invest roughly $70 billion in AI-specific data center capital expenditure over the current fiscal year to support large-scale deals with OpenAI, Meta and other AI customers.
3. Funding Strategy
To finance this accelerated buildout, Oracle intends to raise approximately $40 billion via debt and equity issuance, including a previously announced $20 billion stock offering, following $43 billion in debt financing and $5 billion in equity raised in the fiscal year ended May.
4. Financial Impact and Competition
Higher capital spending deepened Oracle’s free cash flow deficit to $23.7 billion in fiscal 2026, up from $394 million a year earlier, while the company faces pressure from hyperscaler rivals and emerging AI cloud providers.
