Oracle's AI Datacenter Capex Hits $55.7B as Revenue Climbs 21%, Investors Wary

Oracle reported fiscal Q4 revenue of $19.2 billion, up 21 percent year over year, as cloud infrastructure revenue surged 93 percent. But the company's share price fell after it disclosed capital spending of $55.7 billion for fiscal 2026 and plans to spend roughly $70 billion in fiscal 2027, raising questions about how it will fund the buildout.

Cloud infrastructure revenue, which includes Oracle's AI datacenter services, reached $3.4 billion in the quarter, according to CFO Hilary Maxson. The company's remaining performance obligations, or contracted but unrecognized revenue, hit $638 billion, more than 300 percent higher than a year earlier. That figure includes an estimated $300 billion from OpenAI alone, as the AI developer seeks compute capacity for its large language models.

Capital spending plan and funding strategy

Oracle's capex for fiscal 2026 was $55.7 billion, up from $21.2 billion the prior year. For fiscal 2027, Maxson said the company expects net cash outlay for capital expenditures of around $70 billion, with reported capex higher due to customer prepayments and timing impacts of $20 billion to $25 billion. To fund the program, Oracle plans to raise about $40 billion in debt and equity in fiscal 2027, including a $20 billion equity issuance already announced. Maxson stated the company does not anticipate raising additional debt funding in calendar year 2026.

• Oracle added approximately 400 MW of datacenter capacity in Q4, similar to the prior two quarters.
• The company expects to add nearly 1 GW of capacity in fiscal Q1 2027.
• CEO Clay Magouyrk said component prices for memory, SSDs, and hard drives have increased, but Oracle locked prices across space, power, energy, and people costs.
• New customers include a Fusion HCM deal with the US Office of Personnel Management.

Investor concerns and market reaction

Despite the revenue growth, analysts expressed concern about Oracle's ability to fund its expansion. One analyst told Reuters that while demand for cloud infrastructure is real, the funding question "is getting harder, not easier, with capex coming in well above estimates and free cash flow still negative." Oracle's share price fell after the earnings call, reflecting investor jitters over the escalating spending. The company's market value had previously jumped after it disclosed the $455 billion RPO figure, but the capex trajectory now overshadows that optimism.

Oracle's cloud infrastructure revenue growth of 93 percent outpaces many competitors, but the capital intensity of AI datacenter builds means the company must balance rapid expansion with financial discipline. Magouyrk said his job is to accelerate capex to ramp revenue faster, but the $70 billion plan for fiscal 2027, combined with negative free cash flow, suggests the spending spree will continue to test investor patience. Oracle expects to report fiscal Q1 2027 results in September.