Oracle’s (ORCL) stock is down nearly 10% after the technology company announced plans to raise another $20 billion U.S. of capital to finance its artificial intelligence (A.I.) buildout.
The fundraise was announced along with better-than-expected financial results.
For its fiscal fourth quarter, Oracle reported earnings per share (EPS) of $2.03 U.S., which topped the $1.96 U.S. expected on Wall Street.
Revenue of $19.18 billion U.S. surpassed the $19.10 billion U.S. that had been expected among analysts. Sales increased 21% year-over-year.
Revenue from the company’s cloud computing unit increased 47% in the quarter to $9.91 billion U.S. Analysts expected $9.97 billion U.S.
Software revenue, including licenses and support, totaled $6.82 billion U.S., down 2% but above the $6.93 billion U.S. consensus expectation of analysts.
For the 2026 fiscal year, Oracle reported $23.7 billion U.S. in negative free cash flow, with depreciation nearly doubling to $7.62 billion U.S.
The company’s capital expenditures rose 162% to $55.7 billion U.S.
Looking ahead, management maintained their previous revenue guidance that calls for $90 billion U.S. for the 2027 fiscal year. Wall Street expected $88.9 billion U.S. in sales.
They raised their earnings forecast to $8.05 U.S. per share, ahead of the $8.01 U.S. that analysts had penciled in for Oracle.
Unfortunately, the decent results and outlook were overshadowed by Oracle’s plans to raise more money.
The company’s management team said they plan to raise a total of $40 billion U.S. through debt and equity financing, including a $20 billion U.S. share sale.
Stock sales are generally frowned upon by investors as they dilute existing shareholders.
Oracle has already taken on $43 billion U.S. in debt and raised $5 billion U.S. in equity over the past year to fund the company’s A.I. ambitions.
Prior to today (June 11), ORCL stock had risen 3% this year to trade at $201.26 U.S. per share.
Tech Insider
