Oracle prices $20 billion stock and bond sale to pay for AI data centers
The software giant, long based in Redwood Shores, is selling $10 billion in new shares and $10 billion in debt, and its stock fell 8.8% Monday.
Oracle Corp. said late Monday it will raise $20 billion by selling new stock and bonds, money Wall Street sees as fuel for its costly push to build data centers for artificial intelligence.
The company is selling about 86.2 million shares at $116 each, worth $10 billion, plus $10 billion in bonds, a form of loan from investors. The bonds come due between 2029 and 2046 and pay 7% to 8.65% interest a year, according to Oracle's announcement. The sale is expected to close Wednesday. Oracle said the money is for "general corporate purposes," which may include building projects and paying off debt.
Why investors are nervous
Oracle rents computing power to AI companies and has borrowed heavily to build the data centers that provide it. It carried $125.34 billion in debt as of Aug. 31, CNBC reported. S&P Global cut its credit rating in July to one notch above "junk," the label for riskier borrowers. Its shares fell 8.8% Monday and are down 33% this year, CNBC said.
Selling new shares also means each existing share owns a slightly smaller piece of the company.
Oracle had previewed the raise at an investor day last week and said it would be the last outside capital it seeks for its 2027-2030 building plan. It expects to start generating more cash than it spends in the second half of 2028. "This seems to be exactly what they previewed," Rob Oliver, a senior research analyst at Baird, told CNBC.
The local tie
Oracle was based in Redwood Shores, on the Peninsula, until it moved its headquarters to Austin, Texas, in 2020. It still has a large campus there.
Source: Oracle announcement via PR Newswire, Nov. 2, 2026; CNBC; Reuters (2020 headquarters move).