Oracle Plans Massive AI Investment in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5h ago
0mins
Should l Buy ORCL?
Source: CNBC
- Financing Plan: Oracle plans to raise $45 billion to $50 billion in debt and equity by 2026 to meet contracted demand from cloud customers, although this move may dilute existing shareholders' stakes, leading to a 3% drop in stock price.
- CDS Reaction: Following Oracle's financing announcement, its 5-year credit default swaps (CDS) fell by 17%, indicating increased investor confidence in the company's ability to avoid a credit downgrade, prompting analysts to upgrade its debt rating to overweight.
- Market Concerns Eased: Despite Oracle's stock price halving since last September due to financing concerns, the latest funding announcement has bolstered debt investors' confidence, with expectations that CDS prices will compress further.
- Risk from OpenAI Dependency: Analysts highlight that at least $300 billion of Oracle's $523 billion in remaining performance obligations is tied to OpenAI, raising concerns about the company's reliance on AI, which has contributed to a
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Analyst Views on ORCL
Wall Street analysts forecast ORCL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ORCL is 309.59 USD with a low forecast of 180.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
25 Buy
9 Hold
0 Sell
Moderate Buy
Current: 164.580
Low
180.00
Averages
309.59
High
400.00
Current: 164.580
Low
180.00
Averages
309.59
High
400.00
About ORCL
Oracle Corporation offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. The Company operates through three businesses: cloud and license, hardware and service. Its cloud and license business is engaged in the sale, marketing and delivery of its enterprise applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings, and its cloud license and on-premise license offerings. Its hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Its services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Oracle Plans to Raise $50 Billion to Expand Cloud Infrastructure
- Funding Overview: Oracle Corporation plans to raise between $45 billion and $50 billion in 2026 through a balanced mix of debt and equity financing to meet the cloud infrastructure demands from major clients like AMD, Meta, and NVIDIA, demonstrating a strong response to market needs.
- Equity Financing Details: The company expects to raise funds through the issuance of mandatory convertible preferred securities and an at-the-market equity program of up to $20 billion, allowing for flexible financing based on market conditions while maintaining investment-grade financial health.
- Debt Financing Arrangement: Oracle intends to conduct a one-time issuance of investment-grade senior unsecured bonds early in 2026 to cover half of its planned funding for the year, ensuring sufficient capital for its cloud infrastructure expansion.
- Strategic Implications: This funding plan, approved by the Board of Directors, reflects Oracle's prudent approach to capital allocation and transparency, aiming to strengthen its market position by enhancing its cloud capabilities.
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- Oracle Dependency Risk: Oracle's reliance on OpenAI raises investor concerns, particularly regarding the fulfillment of its $300 billion contract, as Oracle's remaining performance obligations reach $523 billion, nearly nine times its revenue over the past four quarters.
- Market Reaction: Nvidia and Oracle shares fell by 2.9% and 2.8%, respectively, while retail sentiment for Nvidia remained neutral, but for Oracle it dropped from 'extremely bullish' to 'bullish', indicating worries about Oracle's financial health.
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- CDS Reaction: Following Oracle's financing announcement, its 5-year credit default swaps (CDS) fell by 17%, indicating increased investor confidence in the company's ability to avoid a credit downgrade, prompting analysts to upgrade its debt rating to overweight.
- Market Concerns Eased: Despite Oracle's stock price halving since last September due to financing concerns, the latest funding announcement has bolstered debt investors' confidence, with expectations that CDS prices will compress further.
- Risk from OpenAI Dependency: Analysts highlight that at least $300 billion of Oracle's $523 billion in remaining performance obligations is tied to OpenAI, raising concerns about the company's reliance on AI, which has contributed to a
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- CDS Movement: The company's 5-year credit default swaps (CDS) fell by 17%, indicating reduced market concerns about a credit downgrade, which analysts attribute to the confidence boost from the financing plan.
- Stock Price Volatility: Despite the financing plan instilling confidence among debt investors, Oracle's stock fell by 3% following the announcement due to concerns that equity financing could dilute existing shareholders' stakes, reflecting market apprehension about shareholder interests.
- Market Reaction: Oracle's CDS surged late last year due to fears surrounding its massive data center commitments, but the announcement of this financing plan is seen as a positive signal to alleviate market panic, although analysts warn that equity holders may not react favorably to the stock issuance.
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- Financing Plan: Oracle plans to raise up to $50 billion through debt and equity sales to enhance infrastructure capacity for its cloud customers, reflecting the company's commitment to maintaining an investment-grade rating and prudent capital allocation.
- Bond Offering: Oracle has launched a $25 billion investment-grade bond offering aimed at funding its cloud infrastructure business while authorizing an at-the-market equity program of up to $20 billion to enhance financial flexibility.
- Strategic Partnerships: This financing initiative will support Oracle's collaborations with cloud customers including AMD, Meta, and Nvidia, further solidifying its position in the rapidly growing cloud computing market.
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- Funding Overview: Oracle Corporation plans to raise between $45 billion and $50 billion in 2026 through a balanced mix of debt and equity financing to meet the cloud infrastructure demands from major clients like AMD, Meta, and NVIDIA, demonstrating a strong response to market needs.
- Equity Financing Details: The company expects to raise funds through the issuance of mandatory convertible preferred securities and an at-the-market equity program of up to $20 billion, allowing for flexible financing based on market conditions while maintaining investment-grade financial health.
- Debt Financing Arrangement: Oracle intends to conduct a one-time issuance of investment-grade senior unsecured bonds early in 2026 to cover half of its planned funding for the year, ensuring sufficient capital for its cloud infrastructure expansion.
- Strategic Implications: This funding plan, approved by the Board of Directors, reflects Oracle's prudent approach to capital allocation and transparency, aiming to strengthen its market position by enhancing its cloud capabilities.
See More
OpenAI and Nvidia's Optimistic Partnership Outlook
- Investment Outlook: OpenAI CEO Sam Altman expresses hopes of being a significant customer for Nvidia long-term, while Nvidia CEO Jensen Huang reveals plans for a substantial investment in OpenAI, despite market concerns causing stock volatility.
- Oracle Dependency Risk: Oracle's reliance on OpenAI raises investor concerns, particularly regarding the fulfillment of its $300 billion contract, as Oracle's remaining performance obligations reach $523 billion, nearly nine times its revenue over the past four quarters.
- Market Reaction: Nvidia and Oracle shares fell by 2.9% and 2.8%, respectively, while retail sentiment for Nvidia remained neutral, but for Oracle it dropped from 'extremely bullish' to 'bullish', indicating worries about Oracle's financial health.
- Deepening Technical Collaboration: OpenAI's computing infrastructure leader states that Nvidia's technology is critical for OpenAI, emphasizing that their relationship is not merely vendor-based but involves deep co-design, with compute capacity expected to steadily increase to approximately 1.9 GW by 2025.
See More
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- Financing Plan: Oracle plans to raise $45 billion to $50 billion in debt and equity by 2026 to meet contracted demand from cloud customers, although this move may dilute existing shareholders' stakes, leading to a 3% drop in stock price.
- CDS Reaction: Following Oracle's financing announcement, its 5-year credit default swaps (CDS) fell by 17%, indicating increased investor confidence in the company's ability to avoid a credit downgrade, prompting analysts to upgrade its debt rating to overweight.
- Market Concerns Eased: Despite Oracle's stock price halving since last September due to financing concerns, the latest funding announcement has bolstered debt investors' confidence, with expectations that CDS prices will compress further.
- Risk from OpenAI Dependency: Analysts highlight that at least $300 billion of Oracle's $523 billion in remaining performance obligations is tied to OpenAI, raising concerns about the company's reliance on AI, which has contributed to a
See More
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- Financing Plan: Oracle plans to raise up to $50 billion in debt and equity over the next year to meet contracted demand from cloud customers, particularly in collaboration with Nvidia, Meta, and OpenAI, highlighting its strategic positioning in the AI sector.
- CDS Movement: The company's 5-year credit default swaps (CDS) fell by 17%, indicating reduced market concerns about a credit downgrade, which analysts attribute to the confidence boost from the financing plan.
- Stock Price Volatility: Despite the financing plan instilling confidence among debt investors, Oracle's stock fell by 3% following the announcement due to concerns that equity financing could dilute existing shareholders' stakes, reflecting market apprehension about shareholder interests.
- Market Reaction: Oracle's CDS surged late last year due to fears surrounding its massive data center commitments, but the announcement of this financing plan is seen as a positive signal to alleviate market panic, although analysts warn that equity holders may not react favorably to the stock issuance.
See More
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- Earnings Report: Amphenol experienced a setback in its earnings report last week, indicating potential challenges ahead.
- Investor Recommendation: Despite the recent earnings dip, investors are advised to hold on to the stock for potential future gains.
See More
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- Financing Plan: Oracle plans to raise up to $50 billion through debt and equity sales to enhance infrastructure capacity for its cloud customers, reflecting the company's commitment to maintaining an investment-grade rating and prudent capital allocation.
- Bond Offering: Oracle has launched a $25 billion investment-grade bond offering aimed at funding its cloud infrastructure business while authorizing an at-the-market equity program of up to $20 billion to enhance financial flexibility.
- Strategic Partnerships: This financing initiative will support Oracle's collaborations with cloud customers including AMD, Meta, and Nvidia, further solidifying its position in the rapidly growing cloud computing market.
- Market Reaction: BNP Paribas noted that Oracle's financing announcement is viewed as a 'clearing event,' which may positively impact its stock price, reflecting market confidence in the growth potential of its cloud business.
See More
