Cloud technology giant Oracle officially filed with the U.S. Securities and Exchange Commission (SEC) on November 2 to issue $10 billion in common stock and $10 billion in corporate bonds, aiming to raise capital for its artificial intelligence infrastructure expansion campaign.
This massive capital raise illustrates the financial strain weighing on cloud providers, mirroring the debt pressures of financing GPU infrastructure and the large-scale data center race exemplified by Google’s data center construction plans.
Plunging Stock and Cost of Capital Pressures
Although management had previously outlined the $20 billion fundraising plan at its investor day the previous week, Oracle shares still tumbled 8.8% during trading on November 2. The market signaled skepticism over the growing debt load the corporation is taking on to procure AI servers.
As of the end of August 2026, Oracle’s total debt reached $125.34 billion, primarily in the form of senior notes. Credit rating agency S&P downgraded Oracle’s credit rating to BBB- in July 2026, leaving it just one notch above speculative grade.
Notably, Oracle’s 5-year credit default swap (CDS) surged to 292 basis points, climbing 265% over the past year alone and reflecting mounting concerns about the corporation’s long-term solvency.
Cash Flow Transition Strategy and Execution Challenges
To reassure investors, Oracle announced that it will cap additional capital market fundraising for the 2027 to 2030 cycle at this $20 billion. The company plans to rely on vendor financing, customer-furnished equipment, and upfront payments from major clients to support operations.
The corporation expects to achieve positive free cash flow in the second half of 2028, while maintaining an ambitious revenue target of at least $225 billion by fiscal year 2030.
However, analysts believe Oracle’s true test lies in its ability to execute on these commitments. If the corporation is forced to return to capital markets for further borrowing after 2027, investor confidence in the viability of its AI cloud business model will face a severe test.