$ORCL falls 8% as $40B financing plan offsets Q4 beat

Oracle $ORCL fell 8% after investors looked past a fiscal fourth-quarter beat and focused on funding needs for its AI infrastructure buildout. CNBC reported that Oracle plans to raise $40B through debt and equity financing, including a previously announced $20B share sale. The company also reported negative free cash flow of $23.7B for fiscal 2026.

The operating numbers were stronger than consensus. Q4 revenue rose 21% to $19.18B, above the $19.1B LSEG estimate, and adjusted EPS was $2.03 versus the $1.96 estimate. The stock reaction showed that capital intensity, not revenue growth, was the dominant variable.

Metric | Oracle figure | Comparison
Stock reaction | -8% | After Q4 update
Q4 revenue | $19.18B | LSEG expected $19.1B
Adjusted EPS | $2.03 | LSEG expected $1.96
Fiscal 2026 free cash flow | -$23.7B | CNBC reported company figure
Planned financing | $40B | Debt and equity

Capital expenditures rose 162% to $55.7B. CFO Hilary Maxson said fiscal 2027 net cash outlay for capex would be around $70B, excluding $20B-$25B of customer prepayments. Oracle maintained fiscal 2027 revenue guidance of $90B and raised adjusted EPS guidance to $8.05, slightly above the $8.01 analyst estimate.

The AI backlog remains the bullish counterweight. Cloud infrastructure revenue rose 93% to $5.8B, and remaining performance obligations reached $638B, above StreetAccount's $595.67B estimate. Bank of America analysts said more than 50% of RPO comes from OpenAI. The next check is whether Oracle can convert that backlog into cash flow while adding almost one gigawatt of computing power in the current quarter.