Oracle filed to sell $10 billion in common stock and $10 billion in senior notes to fund its AI buildout. Shares fell more than 4% on Monday, even though the plan was outlined at last week's investor day. Investor concern about the company's debt load is growing.
Oracle filed plans on Monday to issue new stock and more debt to finance its artificial intelligence buildout. The company will sell $10 billion in common stock and $10 billion in senior notes, according to filings with the Securities and Exchange Commission.
Oracle had already outlined the fundraising at an investor day last week, yet shares tumbled more than 4% Monday.
How Oracle plans to use the money
Oracle said it plans to use the proceeds for general corporate purposes, which may include capital expenditures, repayments of debt and future investments.
The stock had initially bounced after last Wednesday's investor day, when Oracle also issued a revenue forecast of at least $225 billion for fiscal 2030. Even so, stock and bonds in Oracle have been under pressure amid growing investor concerns about the amount of debt the company is taking on to fund AI infrastructure.
Debt markets signal a sentiment shift
Oracle's shares are down 33% in 2026 and 50% over the past 12 months.
Credit markets tell a similar story. The yield on Oracle's investment-grade 4.95% bond due in 2031 is currently 7.157%. Its five-year credit default swaps, which are insurance against default, sit at a spread of 296, up 270% in one year, which S&P Global Market Intelligence's Gavan Nolan said is more in line with a high-end junk bond rating.
Oracle remains an investment-grade credit, but S&P downgraded it to BBB- in July, one rating level above high yield. The company has $125.34 billion in debt as of August 31, with the bulk in senior notes.
Sources: SEC filing, CNBC
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