Oracle's AI funding needs investor confidence, says Evercore

What happened

Evercore said Oracle's ability to clarify how it will fund its AI infrastructure expansion is key to improving investor sentiment ahead of its financial analyst meeting. Evercore estimates Oracle needs $50B to $60B in additional funding before free cash flow turns positive in fiscal 2029.

Confirmed

Global impact / market context

Oracle plans large capital spending, which means heavy investment in data centers, while free cash flow stays negative until fiscal 2029. Clear funding details could ease balance-sheet worries, which means concerns about debt and cash available, and support the shares.

Analyst inference

Evercore values Oracle's software and non-AI cloud businesses at about $197 per share on a debt-adjusted basis, which means accounting for debt. It says the market assigns negative value to the AI cloud infrastructure unit, reflecting funding and execution risks.

Analyst inference

What to watch

1. Watch for details on customer funding, alternative financing, and possible delays at data center projects, which Evercore said investors will look for at the analyst meeting. Proposed
2. Watch clarity on contracted revenue yet to be recognized, called remaining performance obligations, especially excluding OpenAI, plus the growth outlook for Oracle's software business. Analyst inference
3. Evercore kept its $245 price target and estimated Oracle's capital expenditure at $90B to $95B for fiscal 2027, a figure Oracle has forecast. Capital expenditure means spending on long-term assets like data centers. Confirmed

Evidence

• seekingalpha.com