Oracle's Stock Is Plummeting. Is This an Opportunity or a Red Flag?
Written by Catie Hogan for The Motley Fool -> Oracle's plans to raise $40 billion through debt and equity sparked investor anxiety. The company's remaining performance obligations reached a record $638 billion. Shares fell more than 12% after earnings were announced. Oracle '
Oracle's plans to raise $40 billion through debt and equity sparked investor anxiety.
The company's remaining performance obligations reached a record $638 billion.
Oracle 's (NYSE: ORCL) stock is getting pummeled after reporting its fourth-quarter and full-year fiscal 2026 earnings. Shares fell more than 12% after the software giant disclosed its plans to raise $40 billion through debt and equity financing. Only $20 billion of that raise had been previously announced. Oracle's free cash flow is negative for the fiscal year, with a cash burn of $23.7 billion.
The question for investors is whether Wall Street's expectations for tech companies have become untenable, or if this is a red flag for Oracle shareholders.
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The report wasn't bad in any sense. The tech company had record earnings per share, total revenues, and remaining performance obligations for Q4 2026. For the full fiscal year, it was a banner period, with revenues reaching $67.4 billion, a 17% increase. Earnings per share (EPS) were also up 34% to $5.83.
Oracle's outlook for fiscal 2027 is also strong, as the company raised its EPS guidance to $8.05. It also reaffirmed revenue expectations at $90 billion.
To make money, you have to spend money, as the adage goes, and Oracle is doing a lot of that. Capital expenditures exceeded company guidance, and this, along with the additional $40 billion cash commitment for 2027, is what spooked investors.
