Oracle Corp. (NYSE:ORCL) is set to embark on a significant capital raise, aiming to secure between $45 billion and $50 billion in 2026 to bolster its cloud infrastructure capacity. The announcement, made on Sunday, underscores Oracle’s commitment to meeting the rising demand from its largest cloud infrastructure clients.
The funding strategy will involve an equal split between equity and debt financing, marking one of the most substantial capital-raising efforts in Oracle’s history. In a statement, the company indicated that the funds will be used to develop additional capacity in response to contracted requirements from key customers.
On the equity side, approximately half of the capital is expected to be raised through issuances of equity-linked instruments and common stock. This will include mandatory convertible preferred securities, as well as an at-the-market equity program valued at up to $20 billion. For its debt financing, Oracle plans to execute a single, one-time issuance of investment-grade senior unsecured bonds early in 2026. The company has clarified that it does not plan to issue any further bonds throughout the calendar year 2026 beyond this transaction.
The capital raise comes in the wake of Oracle’s fiscal second-quarter earnings report released in December, where the company reported revenue of $16.06 billion, slightly missing Wall Street expectations. However, adjusted earnings surged by 54% year over year to $2.26 per share, surpassing estimates according to data from Benzinga Pro. Oracle’s total revenue increased by 14%, primarily driven by robust performance in its cloud services, with cloud infrastructure revenue soaring by 68% to $4.1 billion.
Oracle’s cloud infrastructure has expanded significantly, now covering 147 live customer-facing regions, with plans for an additional 64 regions under development. In the recently concluded quarter, the company added nearly 400 megawatts of capacity, which includes a 50% increase in GPU capacity compared to the previous quarter.
Looking forward, Oracle projects a growth rate of 40% to 44% in U.S. dollar-based cloud revenue for the third quarter and anticipates overall revenue growth of up to 21%. This optimistic outlook reflects the company’s confidence in its ongoing investments, despite the substantial spending associated with the planned capital raise.
In recent trading, Oracle’s stock has faced challenges, dropping by 32.67% over the past six months. On Friday, shares fell by 2.62%, and in after-hours trading, the stock slightly declined to $164.03, down 0.33%, as reported by Benzinga Pro. Additionally, Oracle’s stock ranks low in value and momentum according to Benzinga’s Edge Stock Rankings, indicating a negative price trend across short, medium, and long-term perspectives.
As Oracle prepares for this ambitious capital raise, the company’s strategy illustrates its determination to enhance its cloud capabilities amid increasing market competition and demand for advanced AI-driven solutions. The success of this initiative could not only solidify Oracle’s position in the cloud market but also reflect broader industry trends as companies increasingly pivot towards cloud-based infrastructure to facilitate digital transformation.
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