Updated version 5 - Oracle raises $20 billion from investors for artificial intelligence business expansion

Updated the stock price information in paragraph 2 and added Bloomberg’s report on pricing in paragraph 4.

Reuters, November 3 - Regulatory filings on Monday showed Oracle ORCL.N plans to raise $20 billion through bond and stock offerings. The software giant is seeking investment from investors to support its costly artificial intelligence and cloud infrastructure projects.

The company’s stock price fell 8.8% to $119.22, bringing its total decline this year to about 39%.

Oracle stated that the funds raised will be used for general corporate purposes, including capital expenditures, debt repayment, acquisitions, dividends, and share repurchases.

According to Bloomberg, citing people familiar with the matter, the pricing for this stock offering is expected to be $116 per share, representing an 11% discount to Friday’s closing price.

Oracle did not immediately respond to Reuters’ request for comment.

This fundraising highlights Oracle’s investment scale in artificial intelligence, as the company strives to more than triple its revenue by fiscal 2030. Last week, the company stated its capital expenditures (link) will peak during this fiscal year and the next, while committing to raise no more than $20 billion in additional funding for AI before fiscal 2030.

On Wednesday, after CFO Hilary Maxson said Oracle also expects free cash flow to turn positive in the second half of fiscal 2028, the company’s stock price rose about 11%.

As of August 31, Oracle's total notes payable and other borrowings stood at $125.34 billion, while fiscal 2026 revenue was $67.36 billion. The company expects fiscal 2030 revenue to exceed $225 billion and adjusted earnings per share to surpass $21.

According to London Stock Exchange Group (LSEG) data, Wall Street expects the company’s adjusted earnings per share for fiscal 2027 to be $8.14.

The bond issuance includes six tranches, with maturities ranging from 2029 to 2046, comprising one floating-rate bond and five fixed-rate bonds. Interest rates, pricing, and share quantities have not yet been determined.

According to Tradeweb data, Oracle’s existing 6.85% bond due in 2066 (US68389XEC56=TE) saw its price drop more than 1.2 cents.

Investors are paying attention to Oracle’s AI spending because the company lacks the revenue scale of cloud competitors like Microsoft and Amazon, and maintains close ties to loss-making OpenAI, the developer of ChatGPT.

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