"The company said Sunday night that it planned to raise up to $50 billion in debt and equity during the 2026 calendar year to fund additional data center capacity for its cloud customers. The market's initial reaction was favorable, with Oracle shares rising about 2% in early trading, as investors took the announcement as confirmation that demand for AI infrastructure remained strong and contracted. The market seemed to feel confident that Oracle actually had a plan to address its roughly $100 billion debt load."
"By trying to prove its independence, Oracle instead reminded everyone just how exposed it is, and how far it is sticking its neck out. To be fair, Oracle's five-year credit default swaps also fell 17%, a sign that investors feel more confident in the company's ability to manage its debt and avoid a credit downgrade. The question is why equities tumbled as well."
Oracle announced plans to raise up to $50 billion in debt and equity during 2026 to expand data center capacity for cloud customers. Investors initially reacted positively, pushing shares up about 2% as they saw sustained demand for AI infrastructure and a potential plan to address roughly $100 billion in debt. A social-media post asserting that the Nvidia-OpenAI deal had no impact on Oracle's financial relationship with OpenAI and expressing confidence in OpenAI triggered investor concern. The post coincided with a rapid equity sell-off that closed the stock down 2.79% while five-year credit default swaps fell 17%.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]