{"id":449445,"date":"2026-02-02T16:46:07","date_gmt":"2026-02-02T16:46:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/449445\/"},"modified":"2026-02-02T16:46:07","modified_gmt":"2026-02-02T16:46:07","slug":"oracle-shares-rise-as-investors-assess-up-to-50-billion-in-new-ai-spending","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/449445\/","title":{"rendered":"Oracle shares rise as investors assess up to $50-billion in new AI spending"},"content":{"rendered":"

Oracle ORCL-N<\/a> gained 2.5 per cent on Monday after Wall Street analysts said the \u200bsoftware company\u2019s $50-billion fundraising plan allays worries over \u200dits ability to finance a massive data-center expansion with OpenAI.<\/p>\n

Long a smaller player in the cloud market, Oracle has emerged as a major player in the business of renting computing power over the past \u200dyear, \u200bthanks to its US$300-billion deal with OpenAI.<\/p>\n

But investors have grown worried about how it would fund the data-centre expansion needed to serve OpenAI and other customers, including Elon Musk\u2019s xAI and Meta. Its shares fell more than 15 per cent last year, as its results in December showed a cash burn of around US$10-billion for the first \u2060half of the fiscal year.<\/p>\n

The company said on Sunday it expects to raise between US$45-billion and US$50-billion in calendar 2026 through a combination of stock sales and debt, arguing that the move reflected its commitment to maintain an investment-grade rating amid the AI spending.<\/p>\n

As much US$20-billion of that is expected to come from sales of its \u200cshares at the market price, \u200dwhile the rest would be funded by the sale of bonds early in 2026. The \u200dcompany said it does not expect to issue additional debt \u200cbeyond that this year.<\/p>\n

\u201cOracle is not only saying they\u2019re committed to investment-grade debt, \u2060but they are sending a clear message to bond investors and the rating agencies that they are,\u201d Guggenheim analysts \u200bsaid.<\/p>\n

Oracle disclosed on Monday that it has filed for an offering of 100 million depositary shares.<\/p>\n

\u201cWe can see how the debt markets will likely be calmer post this transaction as the combination of extra equity and the mandatory convertible will reduce the debt needs and strengthen Oracle\u2019s balance sheet,\u201d Barclays analysts said in a \u200bnote.<\/p>\n

Investors sold Oracle\u2019s credit-default swaps that offer bondholders a hedge against default. Both its 10-year CDS and 5-year CDS dropped about 35 basis points each, according to Markit Data.<\/p>\n

Still, investors remain cautious over whether the hundreds of billions tech firms are spending on AI infrastructure would pay off given limited evidence of real-world productivity gains.<\/p>\n

Strong reception for Google\u2019s latest AI model and a deal for the company\u2019s technology \u2060to power Apple\u2019s AI features has also put pressure on OpenAI in the high-stakes race.<\/p>\n

\u201cThe perception \u2060is that Oracle\u2019s fortunes are now heavily tied to OpenAI and combined with the company\u2019s plans to raise up to US$50-billion \u200cto invest in 2026, nervousness about the situation looks unlikely to go away any time soon,\u201d said Russ Mould, investment director at AJ Bell.<\/p>\n

Oracle has faced heightened scrutiny following a bondholder lawsuit in January and last year\u2019s spike in its credit default swap costs.<\/p>\n

Jefferies analysts said the financing plan \u201cbuys time\u201d for Oracle\u2019s AI ambitions, but warned it could weigh \u200con margins in the near term, and said free cash flow was unlikely to turn positive until FY29.<\/p>\n","protected":false},"excerpt":{"rendered":"Oracle ORCL-N gained 2.5 per cent on Monday after Wall Street analysts said the \u200bsoftware company\u2019s $50-billion fundraising…\n","protected":false},"author":2,"featured_media":449446,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,1397,276,277,49,48,61],"class_list":{"0":"post-449445","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-appwebview","10":"tag-artificial-intelligence","11":"tag-artificialintelligence","12":"tag-ca","13":"tag-canada","14":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/449445","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=449445"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/449445\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/449446"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=449445"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=449445"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=449445"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}