Oracle beats earnings but stock slides on plan to raise another $20 billion for data centers

Oracle reported fourth-quarter results that topped Wall Street expectations on both revenue and earnings per share. The cloud infrastructure unit continued to drive growth, and management said demand visibility into the next fiscal year remained strong. Even so, the stock fell about 4% in after-hours trading.

The selling was triggered by CEO Safra Catz's disclosure on the earnings call that Oracle plans to raise another $20 billion in debt to fund construction of AI data centers. The company has already issued more than $30 billion in bonds over the past eighteen months to pay for Nvidia chips and hyperscale capacity. Free cash flow was negative again this quarter.

Wedbush analyst Dan Ives said the AI contracts Oracle has signed should produce significant revenue over time, but that the company's debt load would reach record levels along the way. JPMorgan and Citi flagged a "capital intensity warning" in their notes. The stock had been up roughly 28% year-to-date before the announcement clawed back part of those gains. (Not investment advice.)