Oracle Forecasts $95 Bn in Capex for FY27, Plans to Raise $40 Bn in Debt and Equity

Oracle on Wednesday forecast capital expenditure of up to $95 billion for fiscal 2027, above Wall Street estimates, as the cloud computing company outlined plans to raise nearly $40 billion through a combination of debt and equity financing in the same period. Its shares fell 8.9% in extended trading following the announcement.

The $40 billion financing plan includes a previously announced $20 billion at-the-market equity issuance. Oracle had spent around $55.66 billion in fiscal 2026, exceeding its own target of $50 billion, and had said in February it aimed to raise as much as $50 billion that year through debt and equity sales.

Data Centre Build-Out at Scale

Oracle Chief Financial Officer Hilary Maxson said on the company's earnings conference call that Oracle expects $70 billion in capital spending of its own in fiscal 2027, plus an additional $20 billion to $25 billion it expects to be repaid by customers, though she did not give a timeline for those repayments. According to a Reuters report, analysts had projected $67.66 billion in capital spending for the fiscal year, as per LSEG data. Maxson also said the company's gross margins will decline over fiscal 2027 as it ramps up data centre projects.

Oracle, which has major contracts to build data centres for customers including Meta Platforms and OpenAI, is working to position itself as a significant rival to cloud leaders Amazon and Microsoft. CEO Clay Magouyrk told analysts on the call that delivery of infrastructure was accelerating. "Our pace of delivery continues to accelerate with our (fiscal first quarter of 2027) delivery approaching one gigawatt, nearly the same capacity as we've delivered in the previous four quarters combined," he said.

The company also said a large Stargate data centre in Texas, being built with OpenAI and other partners, will be more than three-quarters complete within 90 days. OpenAI said customers can begin accessing its coding models on Oracle's cloud platform.

Oracle's remaining performance obligations — a key measure of contracted future revenue — stood at $638 billion, above analyst estimates of $592.52 billion, according to Visible Alpha data, as per the Reuters report. Maxson said for the first time that the company expects 12% of that backlog, or $76.56 billion, to convert to revenue over the next 12 months, with another 34%, or around $216.92 billion, expected in the two years following.

Oracle reported total revenue of $19.18 billion for the fourth quarter, marginally above analyst estimates of $19.10 billion, according to LSEG data, as quoted by Reuters. Adjusted earnings per share came in at $2.03, ahead of the $1.96 analysts had expected.