Oracle beats earnings expectations but stock falls on massive AI spending and debt plans

Oracle reported fourth-quarter fiscal 2026 revenue of $19.18 billion, exceeding Wall Street's consensus estimate of $19.10 billion, with adjusted earnings per share of $2.11 versus expectations of $1.96. The company raised its full-year adjusted earnings per share guidance to $8.05 and maintained its $90 billion revenue target for fiscal 2027. However, the stock declined 2-5% in extended trading following Oracle's announcement that it would raise nearly $40 billion through combined debt and equity financing in fiscal 2027, including a previously announced $20 billion share sale. The company's capital spending in 2026 reached approximately $55.66 billion, exceeding its initial $50 billion target, reflecting the substantial cash requirements for AI infrastructure development. Oracle's remaining performance obligations—contracted future revenue—surged to $638 billion, up 363%, with Bank of America analysts noting that over 50% derives from OpenAI. Despite strong cloud revenue growth of 47% to $9.91 billion and cloud infrastructure revenue jumping 93% to $5.8 billion, investor concerns persist about mounting debt levels and whether AI-driven disruption could undermine traditional software demand.