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Oracle Corporation (ORCL) shares surged approximately 3.6% in premarket trading on Monday, February 2, 2026, reaching $170.48 as of 8:50 AM EST, following the company’s announcement of an ambitious plan to raise up to $50 billion during the 2026 calendar year. The massive fundraising initiative aims to expand Oracle’s cloud infrastructure capacity to meet contracted demand from major customers including Nvidia, Meta, OpenAI, AMD, TikTok, and xAI.

This announcement comes at a critical time for Oracle, as the stock has declined roughly 50% from its September peak, wiping out approximately $460 billion in market value amid investor concerns about aggressive AI spending and mounting debt levels.

Oracle Details $50B Capital Raise to Expand Cloud Infrastructure

Oracle plans to raise the $45-50 billion through a combination of debt and equity issuances, with approximately half coming from equity-linked and common equity offerings. This includes mandatory convertible preferred securities and an at-the-market equity program of up to $20 billion.

Goldman Sachs will lead the senior unsecured bond offering, while Citigroup will lead the at-the-market issuance and mandatory convertible preferred equity offering. The remaining funds will be raised through a single bond issuance early in 2026, following the company’s $18 billion bond sale in 2025, which was one of the year’s largest corporate bond offerings.

The capital raise reflects the enormous scale of investment required to build AI infrastructure and meet demand from Oracle’s largest cloud customers. The company is responding to contracted commitments from major technology firms that are racing to build the computational power needed for artificial intelligence applications.

However, this aggressive expansion has pushed Oracle’s free cash flow into negative territory, where it is expected to remain until 2030 according to Bloomberg data, as the company faces tens of billions of dollars in spending commitments on semiconductors and data center leases.

Shares Jump Premarket as Investors Weigh Expansion Risks

Despite the premarket surge, Oracle faces significant investor skepticism about its AI spending strategy. The stock closed at $164.58 on Friday, January 30, representing a year-to-date decline of 15.34% compared to the S&P 500’s 1.37% gain. The company’s market capitalization stands at approximately $472.86 billion, down from over $930 billion at its September peak.

Oracle’s debt-to-equity ratio has ballooned to 432.51%, and credit default swap prices reached their highest levels since the 2008 financial crisis in December, reflecting Wall Street’s growing concerns about the company’s financial leverage.

Analysts remain divided on Oracle’s prospects. Morgan Stanley recently lowered its price target from $320 to $213 while maintaining an Equal-Weight rating, reflecting concerns about the company’s capital intensity and return profile. The average analyst price target sits at $285.24, suggesting significant upside from current levels, though the wide range between the low of $155 and high of $400 indicates substantial uncertainty.

Oracle trades at a trailing P/E ratio of 30.94 and forward P/E of 24.15, with a profit margin of 25.28% and return on equity of 69.03%. The unusual timing of Sunday’s announcement suggests management may be attempting to stabilize the stock price and restore investor confidence in its cloud infrastructure strategy.

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