Oracle's stock experienced a significant pre-market plunge of 5.85% as investors reacted negatively to the company's ambitious plans to raise up to $50 billion for its artificial intelligence infrastructure expansion.
The software giant announced it expects to raise between $45 billion and $50 billion in 2026 through a combination of debt and equity financing to build additional capacity for its Oracle Cloud Infrastructure business. This massive capital raise aims to meet contracted demand from major customers including AMD, Meta, Nvidia, OpenAI, TikTok, and xAI.
Investor concerns center on potential equity dilution from planned equity-linked and common stock issuances, increased debt levels from a planned one-time bond issuance, and broader worries about the sustainability of massive AI infrastructure investments. The announcement comes as Oracle's stock has already fallen approximately 50% from its September peak, reflecting ongoing market apprehension about the company's aggressive AI spending and its heavy reliance on OpenAI's uncertain financial model.
Comments