Oracle reported a blockbuster fiscal Q4 on June 10, 2026, with sales growing 21%, adjusted earnings per share up 20%, and cloud infrastructure revenue surging 68% year-over-year. The company boasted $523 billion in Remaining Performance Obligations — contracts signed with customers including Meta and Nvidia — suggesting its AI boom is far from over. Yet Oracle's stock still fell 11%, erasing roughly $100 billion in market value in a single session.
The sell-off was driven by concerns over Oracle's funding gap. To build the AI infrastructure needed to meet its record backlog, the company plans to spend between $70 and $95 billion on capital expenditures in fiscal 2027 — more than twice its annual operating cash flow of $32 billion. To bridge the gap, Oracle announced it would raise $40 billion through a combination of $20 billion in new debt and a $20 billion equity offering. Long-term debt already stands at $99.6 billion, up 25% year-over-year, and the company recorded a free cash flow deficit of $23.7 billion for FY2026.
Analysts noted the paradox: Oracle is winning the AI infrastructure race on paper, but funding that race through heavy borrowing and share dilution. "Investors are pricing the future spending, not the past results," one analyst wrote. The stock closed at $184 on June 11 while broader markets rallied — the S&P 500 gained 1.73% and the Nasdaq rose 2.54% on the same day.