Oracle Corporation (NYSE: ORCL) has announced a substantial initiative to secure capital funding aimed at expanding its cloud infrastructure capacity in response to rapidly growing demand. Planned for 2026, this fundraising effort targets raising between $45 billion and $50 billion, representing one of the largest capital raises in the company’s history.
The enterprise disclosed on Sunday that the purpose of this capital raise is to build additional cloud infrastructure in order to fulfill commitments made with its major Oracle Cloud Infrastructure customers. This strategic expansion is directly tied to contractually agreed demand levels, rather than speculative growth.
Several high-profile companies and projects have been identified as key contributors to this increasing demand. These include Advanced Micro Devices, Inc. (NASDAQ: AMD), Meta Platforms, Inc. (NASDAQ: META), Nvidia Corporation (NASDAQ: NVDA), OpenAI, TikTok, and xAI. Collectively, these organizations are driving a significant surge in consumption of Oracle's cloud services.
The $45 billion to $50 billion capital requirement will be raised through a roughly equal split of equity and debt offerings. On the equity front, the company plans to generate about half of the funds via the issuance of common stock and equity-linked instruments. Among these are mandatory convertible preferred securities, along with an at-the-market (ATM) equity program allowing up to $20 billion in share sales over time.
Regarding debt financing, Oracle intends to execute a single, one-time offering of investment-grade senior unsecured bonds early in 2026. The company has clearly stated that it does not expect to issue additional bond debt through the remainder of that year beyond this transaction.
Investment banking leadership roles on the capital raise are assigned with Goldman Sachs & Co. (NYSE: GS) managing the senior unsecured bond issuance, while Citigroup (NYSE: C) will oversee both the quarterly at-the-market equity issuance program and the mandatory convertible preferred stock offering.
This announcement aligns with Oracle's fiscal second-quarter earnings report published in December. The company reported total revenue of $16.06 billion for that quarter, a figure that narrowly missed Wall Street's consensus expectations. However, adjusted earnings per share showed a robust year-over-year increase of 54 percent, reaching $2.26, which beat analyst projections comfortably.
Notably, total revenue growth of 14 percent was driven predominantly by strength in cloud services. Cloud infrastructure revenue experienced a particularly marked escalation, rising 68 percent to $4.1 billion. Oracle's cloud infrastructure footprint currently includes 147 operational, customer-facing regions worldwide, with plans underway to add another 64 regions. During the reported quarter, the company added nearly 400 megawatts of cloud capacity, including a 50 percent increase in graphics processing unit (GPU) capacity relative to the prior quarter, underscoring the focus on meeting high-performance computing demand.
Looking forward, Oracle has provided guidance projecting continued robust growth. It forecasts 40 percent to 44 percent increases in cloud revenue measured in U.S. dollars for the fiscal third quarter, with total revenue expected to grow by as much as 21 percent. This outlook signals significant confidence in the continued expansion and monetization of its cloud infrastructure assets despite the substantial spending required.
Despite these strong operational metrics and forward guidance, Oracle's stock has seen a decline in recent months. Over the last half-year, the company's shares have dropped approximately 32.67 percent. The latest trading day concluded with a 2.62 percent decline, with after-hours trading showing a modest further dip of 0.33 percent to $164.03 per share.
Market analysis tools, such as Benzinga's Edge Stock Rankings, reflect a relatively low score for Oracle in terms of both Value and Momentum categories. The stock demonstrates a negative price trend across short, medium, and long-term time horizons. Investors may perceive the heavy capital expenditure and resultant dilution risks as potential headwinds despite Oracle's strategic positioning in the cloud and AI sectors.