A $25 Billion Reason Why Microsoft Stock in Focus

What happened

Microsoft priced a $25 billion bond sale split into 10 parts. The notes are senior unsecured, meaning no specific assets back them, and each slice is called a tranche. Microsoft plans to use the proceeds for general corporate purposes, and the deal is expected to close on Nov. 4, 2026.

Confirmed

Global impact / market context

This gives Microsoft new borrowed money to fund working capital, capital spending, buybacks, acquisitions and debt repayment without relying only on cash flow. Because S&P rates it AAA, its top score, Microsoft can borrow cheaply, which lowers the cost of funding growth.

Analyst inference

Oracle also outlined plans on Wednesday to raise capital, so two large software companies are tapping debt markets at the same time. For investors, this signals borrowing is being used to fund spending, and Oracle expects to return to positive free cash flow in the second half of fiscal 2028.

Analyst inference

What to watch

1. Microsoft's deal is expected to close on Nov. 4, 2026, so watch whether it completes as planned and whether the company later says how much of the $25 billion went to capital spending versus buybacks or acquisitions. Confirmed
2. Watch whether Microsoft adds more funding sources beyond cash flow, leasing and this bond sale, since finance chief Amy Hood said the company will do so when conditions look attractive. Proposed
3. Watch Oracle's free cash flow, which is cash left after operating costs and investments, because it expects positive free cash flow in the second half of fiscal 2028, and any delay would raise doubts about its capital raising plans. Analyst inference

Evidence

• gurufocus.com