Oracle Raises Another $20 Billion in Debt and Equity

Larry Ellison has a message to Oracle investors: We promise, we’re finally done.

The software-giant-turned-hyperscaler threw two big bones to capex critics at its investor day last week. First: that the company would only raise an additional $20 billion in funding through 2030, notably less than expected. Second: that it would post positive free cash flow in the second half of its next fiscal year (which would be the six months ending May 2028), an earlier expected payoff for its massive AI gamble. Oracle wasted no time in fulfilling the first half of that pledge, revealing in SEC filings on Monday it intends to raise $10 billion in bonds and another $10 billion in equity. 

Sticker Shock and Awe

Wall Street, in turn, wasted no time showing their continued unease: Shares of the company, already down some 30% year to date heading into the week, plummeted another 9% on Monday, wiping out all the goodwill gains earned from last week’s pair of promises. And there’s plenty of reason for the widespread skepticism. In its most recent earnings call, Oracle said it had $125.34 billion in notes payable and other borrowings as of August 31. Its entire fiscal year 2026 revenue, meanwhile, came in at just $67 billion. 

The debt isn’t cheap either: S&P downgraded the company’s debt in July to BBB-, or just a step above junk rating. That status seemed to dictate the terms of the company’s purported final debt sale for the next few years, though it hasn’t put a dent in demand:

• Oracle sold the $10 billion in debt across five different tranches ranging from three to 20 years, according to a source who spoke to Bloomberg. The bonds were priced at 0.3 percentage points higher than the company’s existing debt, while yields on the longest-term notes were priced at 3.35 percentage points higher than Treasuries, or around the typical junk-rated yield range.
• Demand for the bond sale peaked at $38 billion, per Bloomberg, a sign of continued healthy demand in capital markets for even ostensibly junk-rated corporate bonds in the AI space.

Fed Up: Oracle isn’t the only hyperscaler that has to keep an eye on their credit score. Last week, S&P lowered the outlook on Meta’s AA- debt to negative. It’s a sign that the debt could soon be downgraded, as “Meta’s ability to monetize its AI investments is more limited than that of its peers” S&P wrote. Of course, even a single notch downgrade would leave Meta debt comfortably in high-grade territory. It’s a nice reminder: You can get away with a lot if you already have most of the world’s teenagers and many of its adults hooked on your infinite scroll.