Oracle's stock surged 5.01% during pre-market trading on Monday, marking a significant reversal from earlier losses. The enterprise software giant experienced volatile price action following its weekend announcement of plans to raise up to $50 billion to fund artificial intelligence infrastructure expansion.
The sharp upward movement came after Fitch Ratings assigned Oracle's proposed senior unsecured bonds a 'BBB' rating and affirmed the company's Long- and Short-Term Issuer Default Ratings at 'BBB' and 'F2', respectively, with a Stable Outlook. This credit assessment provided market participants with greater clarity on Oracle's financial standing despite its substantial capital expenditure plans for cloud infrastructure buildout.
According to Fitch's analysis, Oracle's near-term elevated capital expenditures for AI compute infrastructure will be supported by multi-year commercial contracts with major customers including OpenAI, Meta Platforms, Nvidia, and others. The ratings agency expects Oracle to recapture these investments within typical contract periods, with incremental revenue and EBITDA generation beginning to normalize credit metrics in fiscal 2027.
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