Nov 2 (Reuters) – Oracle on Monday said it will raise $20 billion through bond and share sales, as the software giant taps investors to fund its costly AI and cloud infrastructure build-out. Oracle priced the offering of 86.2 million shares at $116 each later in the day, an 11.2% discount to Friday’s closing price. […]
Science
Oracle taps investors for $20 billion to finance AI expansion
Audio By Carbonatix
Nov 2 (Reuters) – Oracle on Monday said it will raise $20 billion through bond and share sales, as the software giant taps investors to fund its costly AI and cloud infrastructure build-out.
Oracle priced the offering of 86.2 million shares at $116 each later in the day, an 11.2% discount to Friday’s closing price.
The company will raise about $10 billion from the stock sale and another $10 billion through debt offerings maturing between 2029 and 2046.
Shares of the company fell 8.8% to $119.22 after the fundraising announcement earlier on Monday, bringing their losses this year to about 39%.
Oracle said it would use the proceeds for general corporate purposes, including capital spending, debt repayment, acquisitions, dividends and share buybacks.
Bloomberg News first reported the equity offering’s pricing details.
The fundraising underscores the scale of Oracle’s AI investment as it seeks to more than triple revenue by fiscal 2030. The company said last week that capital spending would peak this fiscal year and next, while pledging to raise no more than $20 billion in additional AI financing through fiscal 2030.
Shares rallied about 11% on Wednesday after CFO Hilary Maxson said Oracle also expects free cash flow to turn positive in the second half of fiscal 2028.
Oracle had $125.34 billion in notes payable and other borrowings, as of August 31, compared with fiscal 2026 revenue of $67.36 billion. It expects revenue to exceed $225 billion and adjusted earnings to top $21 per share in fiscal 2030.
Wall Street expects the company’s adjusted profit per share for fiscal 2027 to be $8.14, according to data compiled by LSEG.
The bond offering comprises five fixed-rate tranches bearing interest rates ranging from 7% to 8.65% and maturing between 2029 and 2046. The final debt offering did not include the floating-rate tranche that Oracle had outlined in an earlier regulatory filing.
Oracle’s existing 6.85% bonds due in 2066 fell more than 1.2 cents on the dollar, according to Tradeweb data.
Investors have focused on Oracle’s AI spending because it lacks the revenue scale of cloud rivals Microsoft and Amazon and has significant exposure to OpenAI, the loss-making developer of ChatGPT.
(Reporting by Akash Sriram in Bengaluru, additional reporting by Shashwat Chauhan, Devika Nair, and Sumedha Mukherjee in Bengaluru; Editing by Shilpi Majumdar, Anil D’Silva, Joyjeet Das, Sherry Jacob-Phillips and Rashmi Aich)