Oracle under pressure: $50B mega-fundraising and debt concerns sink the stock

Oracle shares fell more than 3% in premarket trading following the announcement of an ambitious financing plan aimed at expanding its data center capacity for artificial intelligence. The company said it plans to raise between $45B and $50B over the course of 2026 through a mix of debt and equity, in order to meet already contracted demand from top-tier clients such as Nvidia, Meta, OpenAI, AMD, TikTok and xAI.

Market sentiment was also weighed down by reports from TD Cowen: according to a note released on January 26, Oracle is reportedly considering laying off 20,000 to 30,000 employees — a move that could generate between $8B and $10B in additional free cash flow. The company has not officially confirmed these scenarios, which the analyst described as just one of several “possible paths,” alongside asset disposals and alternative financing options.

Oracle is among the key players in the global race to invest in AI infrastructure, a sector that in 2025 saw data center deals reach a record $61B. However, the aggressiveness of this strategy is fueling investor concerns. In September, the group had already raised $18B through a bond issuance and signed a multi-year $300B agreement with OpenAI.

The stock has lost around 50% from its September highs and had already fallen 11% in December after quarterly results missed expectations. “We are in the final phase for AI-exposed stocks: it’s a binary bet,” said Michael Field, chief equity strategist at Morningstar, highlighting how rising debt levels and potential shareholder dilution are prompting many investors to reduce exposure.

Investment in AI is also dominating this earnings season: Microsoft lost 10% last Thursday after Azure growth came in below expectations, while Meta gained 8% despite — or perhaps because of — the heavy spending announced for artificial intelligence. A sign that the market remains split between enthusiasm and concern over the price to be paid in the race for AI.

Andrea Pelucchi