Oracle (ORCL) Stock; Jumps Nearly 10% as OpenAI Fears Ease, $50B Capital Raise in Focus

TLDRs;

• Oracle shares surged nearly 10% after an analyst upgrade eased fears around its OpenAI exposure.
• Investors are refocusing on Oracle’s plan to raise up to $50 billion in 2026.
• Heavy AI spending is pushing big tech firms deeper into debt markets.
• Upcoming earnings will be key for clarity on cloud demand and cash flow.

Oracle shares staged a sharp rebound to start the week, jumping nearly 10% as investor concerns around the company’s exposure to OpenAI eased and attention shifted back to its ambitious plan to raise up to $50 billion in fresh capital.

The move snapped a recent stretch of volatility that had been driven by questions over cash burn, cloud spending, and how quickly large AI contracts can translate into durable revenue.

The stock closed Monday at $156.59, up 9.7% on the day, after an upgrade from D.A. Davidson helped reframe the market’s view of Oracle’s relationship with OpenAI. The firm argued that earlier fears had pushed sentiment too far in a bearish direction, setting the stage for a relief rally as markets recalibrated expectations.

Analyst Upgrade Sparks Relief Rally

The catalyst for the bounce was a shift in analyst tone. D.A. Davidson upgraded Oracle to “buy,” saying the market had been assigning an overly negative value to the OpenAI partnership. According to the firm, a better-capitalized OpenAI should remain a reliable customer rather than a credit risk, even as it continues to scale aggressively.

Oracle Corporation, ORCL

That view helped cool investor anxiety that Oracle might be overexposed to a single AI customer with massive infrastructure demands. Instead, the upgrade reframed OpenAI as a long-term anchor tenant for Oracle Cloud Infrastructure (OCI), with funding visibility improving rather than deteriorating.

$50B Funding Plan Takes Center Stage

With the OpenAI debate cooling, focus quickly returned to Oracle’s balance sheet strategy. On February 1, the company outlined plans to raise between $45 billion and $50 billion in gross proceeds during calendar 2026 to fund a rapid OCI buildout. The financing mix will include both debt and equity, giving Oracle flexibility, but also putting dilution and leverage squarely on investors’ radar.

Up to $20 billion could come from an at-the-market equity program, allowing Oracle to issue shares gradually at prevailing prices. The remainder is expected to be raised through debt markets, where Oracle has already been active. Earlier this month, the company priced a $25 billion bond sale, underscoring how aggressively large tech firms are tapping capital markets to fund AI-driven expansion.

Debt Markets Feel AI Pressure

Oracle’s move fits into a broader trend across big tech. Heavy AI investment is forcing even cash-rich companies to lean on external financing. Alphabet, for example, just priced a $20 billion bond deal, highlighting how capital intensity is reshaping balance sheets across the sector.

Oracle’s own term sheet shows a wide range of maturities, from floating-rate notes due in 2029 to long-dated fixed-rate bonds stretching out to 2066. As an investment-grade issuer, Oracle can still borrow at relatively attractive spreads, but rising interest costs remain a risk if AI spending fails to deliver timely returns.

Bulls and Bears Still Clash

Not everyone is convinced the rally marks a turning point. Melius Research cut Oracle to “hold” from “buy” on Monday, citing weak free cash flow generation and intensifying competition in AI infrastructure. The firm also cautioned that OpenAI’s success is not guaranteed, pointing to strong rivals such as Anthropic and Google-backed models.

That split in analyst opinion reflects the broader debate around Oracle’s AI strategy. Reports last year suggested OpenAI could commit to purchasing hundreds of billions of dollars’ worth of computing capacity over several years, but investors continue to wrestle with timing. The key question remains whether Oracle must spend heavily upfront, on data centers, chips, and power, before revenue meaningfully ramps.

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