Oracle pursues $20bn stock and bond offerings amid AI buildout

Oracle filed preliminary prospectus supplements on November 2 for $10 billion each of common stock and senior notes, launching concurrent offerings.

Oracle had linked its fundraising to additional computing capacity in a February 1 financing announcement. It said the expansion would meet contracted demand from major Oracle Cloud Infrastructure customers, naming OpenAI, NVIDIA, AMD and Meta among them. It also said a balanced mix of debt and equity would help maintain an investment-grade balance sheet. The February plan envisaged one bond sale early in 2026 and no more bonds that calendar year; November’s filing seeks additional borrowing.

The stock filing illustrates the sale using October 30's closing price of $130.67. At that price, about 76.5 million new shares would take outstanding shares to approximately 3.10 billion. The actual number depends on the eventual sale price. Issuing additional shares reduces the ownership percentage represented by an unchanged existing holding.

The notes comprise six series: floating-rate debt due in 2029 and fixed-rate debt due in 2029, 2031, 2033, 2037 and 2046. The preliminary document leaves individual amounts and interest rates open. The notes are senior, unsecured obligations.

Proceeds are designated for general corporate purposes, including capital expenditure, debt repayment, investments or acquisitions, dividends and buybacks. No particular AI facility is earmarked. The two offerings can close independently, so completing one is not a condition for completing the other.

The amounts match Oracle's October 28 Investor Day plan to limit additional capital-market fundraising through fiscal 2030 to $20 billion: $10 billion of equity and $10 billion of gross debt. Refinancing existing debt is excluded from that ceiling. The plan covers its fiscal 2027–2030 investment cycle.

Capacity expansion and cash requirements

The buildout supports computing used to train models and generate their responses. In an October 27 infrastructure update, Oracle reported adding 850 megawatts of data center capacity in its preceding first quarter. OCI supported more than 200 cloud services, the company said.

Oracle also emphasized keeping capacity usable across different models and workloads, saying training, inference and agent tools have different hardware needs. Its update placed planned Google TPU and Cerebras deployments in 2027.

Oracle's report details the cash requirements. Capital expenditure reached $28.5 billion in the three months ended August 31, versus $8.5 billion a year earlier, driven by data center expansion. Operating cash flow was $23.1 billion and company-defined free cash flow was negative $5.4 billion.

That operating cash flow included $11.4 billion of customer prepayments with a significant financing component. Oracle fully used its earlier at-the-market stock program, issuing approximately 141 million shares for $19.9 billion after issuance costs. Those completed sales are separate from November's proposed common-stock offering.

At Investor Day, Oracle said vendor financing, customer-provided hardware and customer prepayments were expected to reduce upfront cash needs. It forecast peak capital spending in fiscal 2027–2028, followed by a decline in fiscal 2029. It projects positive free cash flow in the second half of fiscal 2028.