Oracle shares surged 11% on Wednesday after the company provided a long-term revenue forecast and detailed its financing plans, easing concerns about its debt load. Co-CEO Caly Magouryk announced at Oracle AI World in Las Vegas that the company expects to generate $225 billion in revenue by fiscal 2030, implying an average annual growth rate of 35%. Oracle also pledged to limit additional fundraising to $20 billion over the next four years, with an equal split between equity and debt.
The software giant, which has been expanding aggressively into AI infrastructure, outlined plans to reduce upfront cash requirements through vendor financing, customer-provided hardware, and prepayments. Analysts had projected revenue growth of just 8% for fiscal 2027, followed by a significant acceleration in the following years, with estimates for fiscal 2030 revenue at $224.2 billion.
Oracle's stock had lost about one-third of its value this year amid worries that rising interest rates and its substantial debt could make its AI investments too costly. The company has issued $117 billion in long-term debt and maintains a BBB- credit rating, the lowest investment-grade level. Its capital expenditures more than doubled last year to $55.7 billion and are expected to rise another 65% this fiscal year to $91.9 billion.
Oracle aims to turn free cash flow positive in the second half of fiscal 2028 and reach more than $30 billion in free cash flow the following year. Analysts expect negative free cash flow of $35 billion this fiscal year and next. The spread on Oracle's five-year credit default swaps has increased nearly 100% this year, reflecting heightened default risk.