Oracle Launches $20 Billion Stock and Bond Sale to Fund AI Buildout, Shares Tumble Up to 9%

Oracle dropped as much as 9% on Monday, with shares touching $119 intraday, after the company filed to raise $20 billion through equal parts common stock and senior unsecured bonds, accelerating its artificial intelligence and cloud infrastructure expansion. The dual offering consisted of a $10 billion six-part high-grade bond sale and a separate $10 billion common stock offering, with proceeds earmarked for capital expenditures, debt repayment, acquisitions, dividends, and share buybacks.

The market reaction was sharp in part because Oracle had described, just days earlier, a hard cap of roughly $20 billion in additional capital raises spread over the next several years through fiscal 2030. By consuming that entire ceiling in a single morning, the company amplified investor concern about the pace and cost of its AI debt load. Oracle shares were already down about 36.5% year-to-date heading into Monday, and the sell-off pushed founder Larry Ellison's net worth down an estimated $11 billion.

Despite the stock pressure, the bond offering drew excess investor demand. Fitch Ratings assigned the new notes a BBB rating and affirmed Oracle's long-term issuer default rating at BBB with a stable outlook. Moody's separately affirmed Oracle's Baa2 rating on the new note offering but kept its outlook at negative. Stephens bucked the bearish tone by upgrading Oracle on its cloud infrastructure outlook, projecting roughly 63% upside from current levels.

The broader market also sold off, with the Nasdaq 100 closing down 3.46% to 28,384.85 as AI spending fears weighed on large-cap technology names. Oracle led a group of 17 companies rushing to sell bonds in the US high-grade market ahead of Tuesday's midterm elections, the longest single-day lineup since September. Options traders moved notably bearish on Oracle, with the risk reversal skew jumping to its highest level since at least April as demand for put protection surged.