Oracle Beats Estimates but Shares Fall 10% on $40 Billion Financing and Higher Capital Spending Plans

Oracle delivered record numbers then watched its stock fall 10%. On June 10, 2026, Oracle Corporation (NYSE: ORCL) reported Q4 FY2026 results that beat Wall Street on every major line. Oracle reported adjusted earnings of $2.11 per share and total revenue of $19.18 billion for Q4 FY2026. This is against analyst expectations of $1.96 EPS and $19.10 billion in revenue, a clean beat on both metrics. 

Despite the beat, Oracle shares dropped 10% in extended trading after the company revealed plans to raise $40 billion in FY2027 through debt and equity. It also disclosed $55.7 billion in FY2026 capital expenditures, 162% above the prior year. Strong earnings and alarming spending projections arrived in the same breath.

Q4 FY2026 Results: The Beat That Wasn’t Enough

Oracle’s Q4 numbers were genuinely impressive across every core metric. Q4 total cloud revenues hit $9.9 billion, up 47% year over year. Within that, Cloud Infrastructure (IaaS) revenue surged 93% to $5.8 billion, while Cloud Applications (SaaS) revenue grew 10% to $4.1 billion. Total Q4 revenues of $19.2 billion were up 21% year over year.

The full Q4 scorecard:

• Adjusted EPS: $2.03 vs. $1.96 expected, beat by 3.6%
• Total revenue: $19.18 billion vs. $19.10 billion expected
• Net income: $4.22 billion, up from $3.43 billion in Q4 FY2025
• Cloud IaaS (infrastructure) revenue: $5.8 billion, up 93% YoY
• RPO backlog: $638 billion, up $85 billion in Q4 alone, beating analyst forecast of $601.1 billion

Oracle also raised its FY2027 full-year non-GAAP EPS guidance to $8.05, above analyst consensus of $8.01, while reaffirming its $90 billion revenue target for FY2027.

Why Oracle Stock Fell 10%: The $40 Billion Capital Question

The earnings beat was real. The spending shock was bigger. Oracle announced plans to raise approximately $40 billion in FY2027 through a combination of debt and equity financing. This also including its previously announced $20 billion at-the-market equity issuance program on top of the $43 billion in debt and $5 billion in equity it already raised during FY2026. 

For the full FY2026, Oracle reported negative free cash flow of $23.7 billion, as capital expenditures skyrocketed 162% to $55.7 billion, well above the $50.9 billion analysts had expected. The FY2027 outlook is even larger:

• FY2027 net capex: $70 billion
• FY2027 total capex (including customer prepayments): $90-95 billion
• Analyst prior expectation for FY2027 capex: $61.5 billion, missed by 14%
• Oracle CFO Hilary Maxson said $75 billion in customer prepayments and customer-supplied hardware will substantially reduce the amount of capital Oracle must raise for data center construction.

The equity issuance component carries dilution risk. That, combined with the debt load, is what sent ORCL shares down 10% in extended trading on June 10.

Stargate, OpenAI, and Oracle’s AI Infrastructure Bet

Oracle is not spending blindly; it is building toward the most ambitious AI infrastructure pipeline of any cloud company outside Microsoft and Amazon. Oracle CEO Clay Magouyrk said the company plans to bring online almost 1 gigawatt of computing power in Q1 FY2027. It roughly equal to Oracle’s total compute capacity added across all of FY2026. 

The massive “Stargate” data center in Texas, built with OpenAI, SoftBank, and others, will be more than three-quarters complete within 90 days of the June 10 earnings call. OpenAI customers can already access cutting-edge coding models on Oracle’s cloud infrastructure. Bank of America analysts noted that over 50% of Oracle’s $638 billion RPO backlog comes from OpenAI alone. This makes that single relationship the foundation of Oracle’s FY2027 revenue story.

Conclusion

Oracle’s Q4 FY2026 results confirmed what its cloud growth trajectory already signaled: the company is executing at a record pace. But the $40 billion capital raise, $55.7 billion in FY2026 capex, and a projected $70-95 billion in FY2027 spending tell investors that Oracle’s AI ambitions come at a steep price.

With the ORCL stock down 10% on June 11 and FY2027 guidance pointing to $90 billion in revenue and $8.05 in adjusted EPS, the numbers are strong; the question the market is asking is whether the capital bill is sustainable.

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.