$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.

Not investment advice. Verify all figures with primary sources before acting.