The Oracle shares dropped roughly 4% in the pre-market trading on 2 February 2026, after the software conglomerate announced that it plans to increase its cloud and artificial-intelligence infrastructure to range between $45-$50 billion.
This move also demonstrates the active approach by Oracle to gain a larger portion of the AI-powered cloud market, as well as reviving the concerns about its ever-growing level of indebtedness and the risk of unknown returns in the future.
Why Are Investors Nervous?
Oracle, with billionaire chairperson Larry Ellison, revealed that the capital will be used to expand cloud computing for important customers, such as AMD, Meta, Nvidia, OpenAI, Tik Tok, and xAI.
The company will meet its funding target in a somewhat balanced mix of debt and equity to include equity-linked securities, common stock, at-market programme of maximum up to $20 billion and senior unsecured bonds that are expected in early 2027.
In spite of such a mixed-field, investors are on guard. Similarly, Oracle (ORCL) was sued on Wednesday by bondholders who claim they lost money because the company, led by billionaire Larry Ellison, failed to disclose the need to sell significant debt to build its artificial intelligence infrastructure.
The proposed class action was filed in New York state court in Manhattan on behalf of investors who purchased $18 billion in notes and bonds issued by Oracle in September. Ellison and Oracle’s banks have also been named as defendants. Stock has fallen, which makes investors in the market skeptical of whether AI-related spending can yield sustained revenue.
The AI Infrastructure Race
Oracle is not singular in making massive investment over AI data centers; cloud rivals Amazon, Microsoft, and Google are also spending tens of billions of dollars to scale capacity growth, but long-term demand is obscure.
According to Jefferies, Oracle is entering a new growth phase, fueled by rising demand for AI infrastructure and steady adoption of its cloud platform. Analysts believe Oracle’s integrated One-Oracle approach, which combines its database, applications, infrastructure, and AI tools, positions the company well against cloud leaders such as Amazon and Microsoft.
Jefferies argued that Oracle’s new long-term goals demonstrated that the company had changed. The company expects its revenues to more than quadruple, reaching $225 billion by the end of fiscal 2030. This represents a 31% annual growth rate. Oracle Cloud Infrastructure is its fastest-growing segment, expected to generate $166 billion in revenue at a 75% annual rate.
Said Russ Mould, investment director at AJ Bell.
The perception is that Oracle’s fortunes are now heavily tied to OpenAI and combined with the company’s plans to raise up to $50 billion to invest in 2026, nervousness about the situation looks unlikely to go away any time soon.
What Comes Next?
The coming few months will be critical. To the extent that Oracle is able to turn congested demand on high profile customers into the long-term cloud and AI sales, the looming threat to the balance sheet can be rationalized.
In its turn, the failure of the expected revenue to occur can force the market participants to insist on cost discipline to a greater degree, and the Oracle bet of AI to cost in the $50 billion will be a decisive test of the success of the company to turn infrastructure size into an actual earnings power.
