Oracle beats on quarterly revenue and profit, but shares slide on $40 billion financing plan

Adjusted earnings per share came in at $2.11, compared with $1.70 in the same quarter a year earlier and ahead of the $1.96 consensus estimate. The combined segment result was, however, slightly below analyst expectations, and analysts at Vital Knowledge described Oracle's quarterly performance as decent.

The company also confirmed its full fiscal 2027 revenue target of $90 billion and raised its non-GAAP EPS guidance for that year to $8.05. For the current first quarter, Oracle expects revenue growth of 27% to 29%, signaling continued momentum in its core businesses.

Cloud and AI investments drive growth

Cloud infrastructure was a key driver, with revenue rising 93% year-on-year to $5.8 billion, slightly above expert estimates. Combined software subscriptions and cloud infrastructure revenue climbed 48% to $9.9 billion, underscoring how central AI-related demand has become to Oracle's top line.

The strong results were overshadowed, however, by the scale of Oracle's investment plans. The company disclosed that it plans to raise approximately $40 billion in fiscal 2027 through a combination of debt and equity, including a previously announced $20 billion share issuance. Earlier, in February, Oracle had said it intended to raise up to $50 billion this year through bonds and share sales.

A $40 billion fundraising plan weighs on shares

Oracle has already spent $55.7 billion on investments in the past fiscal year ending May, primarily on AI technology, a figure that significantly exceeded the originally planned $50 billion. Vital Knowledge analysts stated that Oracle will need more debt and equity to build capacity for its growing order backlog, framing the fundraising as necessary rather than optional.

The market reaction was sharp. Oracle's share price was down 9.08% in pre-market trading on the New York Stock Exchange at $182.99. The stock had previously recovered to $250 during the recent AI and tech rally before falling back to around $200, suggesting that the financing plans — rather than the quarterly numbers — are driving the current sell-off.

Investors weigh AI ambition against balance-sheet risk

The episode highlights the tension in the AI infrastructure race: companies must spend aggressively to capture demand, but heavy capital needs can unsettle shareholders who prefer measured balance-sheet expansion. Oracle's results, while operationally strong, have reignited debate about how the AI build-out will be financed across the technology sector.