AI Investment Becomes a 'Financial Black Hole'... Oracle to Raise Additional $40 Billion

Investor Concerns Grow Despite Strong Q4 Results

2026 Fiscal Year CAPEX Exceeds Initial Forecast by $5.6 Billion

Oracle's stock price plummeted on June 10 (local time) after the company announced plans to raise a total of $40 billion, including a $20 billion new share issuance, to expand its artificial intelligence (AI) data centers. Investors’ concerns grew as the company sought another round of funding, especially since this fiscal year’s annual capital expenditures (CAPEX) were approximately $5.6 billion higher than Oracle’s own forecasts, reaching about $8.5 billion more than expected.

Oracle logo. Photo by Reuters-Yonhap News

According to business news outlet CNBC, Oracle stated during its fiscal 2026 fourth quarter (March–May) earnings release that it plans to raise an additional $40 billion through the issuance of bonds and stocks, including the previously announced $20 billion paid-in capital increase.

Previously, Oracle raised $43 billion through corporate bond issuance in the fiscal year 2026. Additionally, the company secured $5 billion in equity-based capital through stock issuance. The objective was to build data centers for lease to hyperscaler clients. The company also cited the need to purchase graphics processing units (GPUs) for these data centers as a reason for relying on external funding.

However, CNBC pointed out that market concerns are mounting over whether AI demand can justify such massive investment. In reality, Oracle’s fiscal 2026 free cash flow (FCF) recorded a loss of $23.7 billion. CAPEX for data center construction and related activities surged 162% year-on-year to $55.6 billion, far exceeding the company’s previously projected amount of $50 billion.

Even the strong quarterly results announced on this day were not enough to ease investors’ worries. Oracle’s fourth quarter earnings per share (EPS) stood at $2.03, and revenue reached $19.18 billion—both exceeding market expectations (EPS of $1.96 and revenue of $19.1 billion). Revenue increased by 21% year-on-year. The company maintained its fiscal 2027 revenue forecast at $90 billion and raised its adjusted EPS forecast to $8.05. Market consensus was for revenue of $88.9 billion and EPS of $8.01.

News of the additional funding plans sent the stock lower in after-hours trading. Oracle’s share price dropped by more than 10% in post-market trading after the closing bell.

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