Oracle expects to raise $40B through debt and equity financing in FY 2027

Oracle is gearing up for one of the largest capital raises in enterprise tech history. The company plans to generate between $45 billion and $50 billion in gross cash proceeds through a combination of debt issuance and equity financing, with the bulk of the capital earmarked for expanding its cloud infrastructure to meet surging AI demand.

The financing playbook

The capital raise is structured as a roughly 50/50 split between debt and equity. On the debt side, Oracle plans to issue one-time senior unsecured bonds. On the equity side, the company is deploying at-the-market offerings totaling up to $20 billion alongside mandatory convertible preferred securities.

The proceeds are primarily aimed at expanding Oracle Cloud Infrastructure, known as OCI, to handle the computational demands of AI-heavy customers. OpenAI, Meta, and Nvidia are all driving demand for Oracle’s cloud capacity. The most headline-grabbing piece of the puzzle is a reported five-year computing deal with OpenAI valued at $300 billion, with revenue expected to start ramping meaningfully around 2027.

To support the buildout, Oracle has already increased its capital expenditure guidance for fiscal year 2026 by $15 billion, bringing total capex to $50 billion. That spending is specifically tailored for the FY2027 infrastructure rollout.

The numbers backing the bet

In Q3 of fiscal year 2026, the company reported revenue of $17.2 billion, a 22% increase year-over-year. IaaS revenue surged 68% compared to the same quarter a year earlier.

Oracle’s remaining performance obligations have ballooned to $523 billion. That figure represents the total value of contracted but not yet recognized revenue. The revenue trajectory points toward FY2027 as the inflection point, when the new OCI capacity comes online and the major AI contracts, particularly the OpenAI deal, begin contributing at scale.

What this means for investors

A $45 billion to $50 billion capital raise also means significantly more debt on the balance sheet and dilution for existing shareholders. Analysts have flagged leverage risk as a genuine concern, particularly given the boost in performance obligations reflecting hundreds of billions in long-term contract revenues.

The mandatory convertible preferred securities eventually convert into common equity, meaning existing shareholders face dilution down the road. The at-the-market equity offerings will also increase the share count over time.

The absence of any mention of crypto assets or blockchain initiatives within Oracle’s financing announcement suggests a firm focus on AI and cloud sectors rather than diversifying into digital currencies.

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