Oracle Shares Surge 11% After Long-Term Revenue Target and Financing Plan Calm Debt Fears

Oracle stock climbed 11% on Wednesday after the company laid out a long-term revenue goal of $225 billion for fiscal 2030 and said it would cap additional fundraising at $20 billion. The revenue target implies average annual growth of 35%.

Speaking at its investor day, the company said the money raised under its financing plan for fiscal 2027 through 2030 will be split evenly between equity and debt. In a filing with the Securities and Exchange Commission, Oracle said, "Vendor financing, customer-provided hardware and customer prepayments are expected to reduce upfront cash requirements through the transition to positive free cash flow."

The forecast sits close to what Wall Street was already modeling. Analysts surveyed by LSEG projected fiscal 2030 revenue of $224.2 billion, and they expected growth of 8% in fiscal 2027 before a sharp acceleration over the following two years.

Before Wednesday's rally, Oracle shares had fallen by about one-third this year. Investors worried that rising interest rates and the company's large debt load would make its artificial intelligence buildout too expensive. Oracle has issued $117 billion in long-term debt, and S&P rates it BBB-, the lowest investment-grade level and one step above junk.

Oracle, long established as a leader in enterprise software, moved aggressively into AI infrastructure last year. The goal was to compete with hyperscalers such as Google and Amazon while also supplying capacity to OpenAI. According to FactSet, its capital expenditures more than doubled to $55.7 billion in fiscal 2026 and are expected to rise another 65% this fiscal year to $91.9 billion.

To cover those rising costs, Oracle needs revenue to grow from the buildout. The company said its operating margin in fiscal 2030 will exceed 40%.

Oracle also outlined a path to positive free cash flow. It expects to turn positive in the second half of fiscal 2028 and to generate more than $30 billion in free cash flow the following year. By comparison, FactSet data show analysts anticipate negative free cash flow of $35 billion this fiscal year and a similar figure next year.

Credit markets have also reflected the concern. The spread on Oracle's five-year credit default swaps, which function as insurance against default, stands at 277 basis points. It reached about 320 basis points earlier this month and is up almost 100% this year.