Evercore Says Oracle Must Answer One Big AI Question

What happened

Oracle is heading into its financial analyst meeting with a major question about how it will fund its large AI infrastructure expansion. Evercore says clearer answers on this financing could improve investor sentiment after Oracle was caught in a selloff across AI infrastructure names.

Confirmed

Global impact / market context

Oracle's heavy borrowing and stock sales make its balance sheet central to the investment case, not just its AI growth. Evercore estimates the core software business alone could be worth about $100 per share, suggesting investors currently give little value to the cloud infrastructure unit.

Analyst inference

Oracle raised $43 billion of debt and $5 billion of equity in fiscal 2026, and plans around $40 billion more in fiscal 2027. That spending ties the stock to financing conditions, so higher debt costs or weak stock sales could pressure the shares even as demand stays strong.

Analyst inference

What to watch

1. Oracle said it expects to raise around $40 billion through debt and equity in fiscal 2027, including a previously announced $20 billion at-the-market stock program. Confirmed
2. Watch whether management explains how it will fund AI infrastructure without stretching the balance sheet, which could reduce the discount investors apply to the cloud business. Analyst inference
3. Watch the backlog, reported at roughly $664 billion by Barclays, for signs that long-term cloud and AI contracts keep growing and support spending plans. Analyst inference

Evidence

• gurufocus.com