Oracle shares fell 11% on June 11, 2026, marking their worst single-day performance since January 2025, after the company announced plans for an additional $20 billion capital raise and reported negative free cash flow for the fiscal year. The stock is now down about 8% year-to-date, underperforming the Nasdaq, which is up approximately 9% over the same period [1].
Despite the negative market reaction, Oracle reported strong fiscal fourth-quarter results, with revenue rising 21% to $19.18 billion, surpassing the $19.1 billion analyst estimate, and adjusted earnings per share of $2.03, beating the $1.96 consensus. However, the company's aggressive investment in artificial intelligence infrastructure has raised concerns among investors, as free cash flow for the last fiscal year was negative $23.7 billion [1].
Oracle disclosed plans to raise $40 billion through debt and equity financing, including a previously announced $20 billion share sale. In fiscal 2026, the company had already raised $43 billion in debt and $5 billion in equity. Capital expenditures surged 162% to $55.7 billion, and new CFO Hilary Maxson projected net capex outlay for fiscal 2027 at around $70 billion, excluding $20-25 billion in customer prepayments [1].
The company maintained its revenue guidance of $90 billion for fiscal 2027 and increased its adjusted EPS forecast to $8.05, slightly above analyst projections. For the fiscal first quarter, Oracle guided for adjusted EPS of $1.72 to $1.76 and revenue growth of 27% to 29%, both ahead of analyst expectations. Cloud infrastructure revenue soared 93% to $5.8 billion, and the remaining performance obligation reached $638 billion, up 363%, with over half attributed to OpenAI through their Stargate AI infrastructure partnership. Analysts at Piper Sandler and Bank of America remain constructive on Oracle's AI-driven growth and recommend buying the stock [1].
CEO Clay Magouyrk stated that Oracle aims to bring online nearly one gigawatt of computing power in the current quarter, matching the total for fiscal 2026 [1].
CONCLUSION
Oracle's significant capital raise and negative cash flow have triggered a sharp sell-off, despite robust revenue and earnings growth. While investor concerns center on the sustainability of heavy AI-related spending, some analysts remain optimistic about Oracle's long-term AI-driven growth prospects. The market will closely watch Oracle's ability to translate its investments into profitable returns.