Oracle Announces $95 billion Capital Expenditure for Fiscal 2027
Oracle disclosed that it expects capital expenditures of up to $95 billion in fiscal 2027, a level that significantly exceeds the $67.7 billion analysts had projected according to LSEG data. The company indicated that it anticipates recovering up to $25 billion of this outlay from customer repayments, leaving roughly $70 billion as its own spending, as stated by Chief Financial Officer Hilary Maxson. Maxson added that the increased outlay will cause gross margins to step down in the current fiscal year as Oracle accelerates its data‑center build‑out.
To fund the plan, Oracle intends to raise nearly $40 billion through a combination of debt and equity in fiscal 2027, which includes a previously announced $20 billion at‑the‑market equity issuance. Earlier in the year, the company had flagged intentions to raise up to $50 billion via debt and equity sales.
Oracle’s recent spending history shows it spent $55.7 billion in fiscal 2026, surpassing its own target of $50 billion. The firm has secured major data‑center contracts with customers such as Meta Platforms and OpenAI, positioning itself as a challenger to cloud leaders Amazon and Microsoft.
Financial results for the fourth quarter revealed revenue of $19.18 billion, marginally above the consensus forecast of $19.10 billion. Adjusted earnings were $2.03 per share, exceeding the expected $1.96. Cloud services revenue reached $9.9 billion, up 46% year‑on‑year in constant currency, while Oracle Cloud Infrastructure revenue surged 92% to $5.8 billion. Total software revenue slipped 2% in constant currency to $6.8 billion.
The market reaction was swift: Oracle’s shares fell more than 10% in pre‑market trading on the announcement day, and SAP (NYSE:SAP, ETR:SAPG) saw its stock decline over 4% following the news, reflecting investor concerns about the competitive pressure of Oracle’s AI‑focused capital spending.