AI BriefingOracle Stock Plunges 11% on Expanded Capital Raise and Cash Flow Concerns
Key point
Oracle's stock plunged after the company announced a large-scale capital raise plan to expand AI infrastructure and disclosed negative cash flow.
Details
Oracle's stock plunged 8-11% despite strong earnings. This was due to investor concerns over the company's announced large-scale capital raise plan and negative free cash flow of $23.7 billion for the last fiscal year.
Oracle plans to raise an additional $40 billion in total through debt and equity, including the previously announced $20 billion stock issuance. Capital expenditure (CAPEX) for building AI infrastructure surged 162% year-over-year to $55.7 billion.
Key financial metrics and growth trends are as follows:
- Revenue: Up 21% to $19.18 billion (above market expectations)
- Cloud infrastructure revenue: Surged 93% to $5.8 billion
- Remaining Performance Obligations (RPO): Up 363% to $638 billion (OpenAI accounts for more than 50%)
The company maintained its fiscal 2027 revenue guidance at $90 billion, and remains positive on AI-driven consumption growth.
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