Oracle Caps New AI Financing at $20 Billion and Promises Positive Free Cash Flow by Mid-2028

Oracle told investors on Wednesday that the era of ever-larger capital raises is ending. Speaking at the company's investor day in Las Vegas, CFO Hilary Maxson said Oracle will raise no more than $20 billion in additional funding through fiscal 2030, split evenly between debt and equity, and called that amount "the final amount needed to fund the remainder of this cycle."

The pledge is designed to answer the question that has hung over the stock for months: how a company that has signed cloud contracts worth hundreds of billions of dollars, largely with a single loss-making customer, OpenAI, will pay for the data centers those contracts require. Oracle had $125.34 billion in notes payable and other borrowings as of August 31, against roughly $36.37 billion in cash, and its five-year credit default swaps sat at 287.2 basis points this week.

The company's timeline: capital expenditures peak this fiscal year and next, free cash flow turns positive in the second half of fiscal 2028, and exceeds $30 billion in fiscal 2029 as spending declines. Oracle said it expects to stop relying on outside funding for growth from fiscal 2029, with net debt falling below 3.5 times annual core earnings that year. Until then, vendor financing, customer-provided hardware and customer prepayments are expected to reduce upfront cash needs. The $20 billion cap excludes the $20 billion equity offering Oracle completed in the first quarter.

Investors took the guidance as the reassurance they wanted. Oracle shares closed up about 11 percent at around $144, adding roughly $40 billion in market value in a single day — the stock's biggest gain in months. Analysts tracked by FactSet had expected negative free cash flow of more than $13 billion across the final two quarters of fiscal 2028; the new targets imply the opposite. Rival AI infrastructure names read the same signal: CoreWeave, Nebius, Applied Digital and Iren gained between 2.1 and 5 percent.

Oracle also set long-horizon targets that are, by its own framing, ambitious. For fiscal 2030 it forecast revenue above $225 billion — implying more than 35 percent compound annual growth from fiscal 2026 — with adjusted operating margins above 40 percent and adjusted earnings of more than $21 per share. It reaffirmed fiscal 2027 guidance of more than $90 billion in revenue and $8.10 in adjusted earnings. These are company projections, and Emarketer analyst Jacob Bourne cautioned they are "ambitious and far from guaranteed."

The financing pledge lands in the middle of a busy week. At its Oracle AI World conference, the company said it would become the first hyperscaler other than Google itself to offer Google's custom TPU chips, starting next year, and committed to deploying NVIDIA's Vera Rubin systems at multi-gigawatt scale on its cloud. It also expanded its OpenAI partnership to put OpenAI models inside Fusion, NetSuite and ChatGPT enterprise workflows.

The deeper point for the industry: the market has been pricing AI infrastructure debt like a risk in its own right, and Oracle — the most leveraged of the big builders — just got rewarded for promising to stop adding to it. Whether the plan survives contact with OpenAI's own cash burn is the bet Oracle just asked investors to take.