Oracle shares rise as group targets up to $50bn for AI infrastructure
Cloud computing company seeks to meet surging demand from major clients including OpenAI, Meta and Nvidia
Oracle shares rose 3.5% ahead of the US market open after the company announced plans to raise between $45 billion and $50 billion this year to expand its artificial intelligence and cloud infrastructure capabilities.
The group said the capital will support data centre investment to meet contracted demand from major customers, including Nvidia, Meta Platforms, TikTok, OpenAI, xAI and Advanced Micro Devices.
It intends to fund the buildout through a combination of debt and equity, with roughly half coming from equity-linked and common stock issuance.
The remainder is expected to be raised through a single issuance of investment-grade senior unsecured bonds early in the year.
Investor sentiment has cooled in recent months amid concern that escalating AI-related spending may not be sustainable. Oracle has invested heavily in Nvidia chips and networking equipment, with significant outlays made before revenue from long-term contracts is recognised.
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Last year, the company secured several large-scale deals, including a five-year contract reportedly worth $300 billion with OpenAI. In September, its shares surged 36% in a single session following strong bookings.
Analysts at Jefferies said confidence may recover if Oracle can deliver on its existing client commitments, although further fundraising could be required beyond 2027, with positive free cash flow not expected until 2029.
