Oracle shares fell 2% Monday following the company’s announcement it planned to raise upwards to $50 billion in 2026.
Funding rounds of that size are no longer unusual. The surge in AI investment and the growing need for cloud capacity and data centers have pushed many companies to seek massive financing. But Oracle’s recent run has been unusually volatile. Just a few months ago, its shares jumped 40% in a single daybriefly making CEO Larry Ellison the world’s richest person (ahead of Elon Musk).
That spike came after Oracle reported a 359% increase in its remaining performance obligation (RPO, which are expected revenues based on customer commitments). That was driven by a $300 billion contract with OpenAI. Things haven’t gone so well since then, though.
The stock saw a big tumble after the company reported earnings in December that fell short of analyst’s revenue expectations, the stock saw a big tumble. And Oracle shares today are well below where they stood before the spike. As of Monday, they were more than 30% lower than the mid-September level.
The need to build out the infrastructure remains, though, thus the hunt for financing, which will be raised in debt and equity. Oracle, on Sunday, said it plans to use the $45 to $50 billion it hopes to raise this year to expand its cloud capacity as demand increases from customers including Nvidia, Meta, OpenAI, TikTok and xAI.
While the stock was higher at times on Monday, investors began to have doubts as the day went on. In recent months, the market has become increasingly concerned about Oracle’s aggressive AI buildout plans, as well as the debt the company is taking on. That has led to the underperformance of the stock.
An overreliance on OpenAI may also be a factor. While Oracle’s RPO announcement last fall gave shares a boost, a similar announcement from Microsoft last week (where RPO jumped 110% to $625 billion, with 45% of that number being a commitment from OpenAI) saw that company’s stock tumble.
