Oracle (ORCL) has fallen below $140, down more than 5% from yesterday’s close at $144.54. The stock surged +10.73% on Wednesday, marking its best day since May. It traded between $128.38 and $148.48, with volume nearing 82 million shares against a 30 million average. The jump added more than $40 Billion in market value.
Investor Day Answers Oracle’s Cash Question
For months, investors have wondered how Oracle will pay for its AI buildout. Capex more than doubled to $55.7 Billion in fiscal 2026 and is expected to rise another 65% to $91.9 Billion this year. Oracle now expects free cash flow to turn positive in the 2nd half of fiscal 2028 and reach at least $30 Billion in fiscal 2029. Whereas, analysts had expected that year to remain negative.
A $20 Billion Funding Cap Calms Credit Fears
Oracle’s credit rating fell to BBB-, one point above junk, while the cost of insuring its debt had been rising. The company now caps new capital-market funding for fiscal 2027 to 2030 at $20 Billion, which will be split evenly between equity and debt. Oracle expects growth to be self-funded from fiscal 2029, with net debt below 3.5 times adjusted EBITDA. This could limit both dilution and leverage as the company expands its AI infrastructure.
Meanwhile, Oracle expanded work with Nvidia on multi-gigawatt Vera Rubin capacity, alongside Intel, Cerebras and SambaNova, per its press releases. These partnerships could help Oracle Cloud Infrastructure meet demand without depending on one chip vendor.
Additionally, Oracle reaffirmed fiscal 2027 revenue of at least $90 Billion and EPS of $8.10. It also expects revenue of $225 Billion or more in fiscal 2030, a 40% operating margin and EPS above $21. This makes annual growth above 35% from $67.4 Billion. At $144.54, the stock trades near 18 times fiscal 2027 EPS and under 7 times the fiscal 2030 target. However, these are company goals, not forecasts.
The Fed Hold Eases Oracle’s Financing Worry
Yesterday’s rally came as the Fed held rates at 3.75% to 4.00%. Two officials dissented in favor of a hike, but Chair Kevin Warsh said tightening was starting to work. And in response, the 2 year yield fell. The S&P 500 closed higher for the first time on a Fed decision day since December 2025. However, the 10-year yield at 5% still keeps funding costs high.
Analyst Targets and What to Watch Next
Initial support starts at $131.32 level, and the resistance sits at $148.48 level, followed by 2nd resistance at $160 level. Amazon will report its earnings later today, which will test the same question of AI spending against cash generation.
On technical ground, holding $131 level could keep the Investor Day gap intact. Any close above $148.48 level will target $160 level. And any drop below $131 level would mean the rally has fully faded.
Today’s FXLeaders Live Session
Wednesday’s FXLeaders live session covered gold, oil and the US dollar index key levels on Fed decision day.
FAQs
Why did Oracle stock rise on Wednesday?
Oracle shares surged after the company outlined free cash flow targets and capped new capital-market funding at $20 Billion through fiscal 2030.
Bottom Line:
Oracle’s free cash flow targets helped ease concerns about its AI spending and debt. However, the company must deliver on its fiscal 2028 and 2029 cash flow outlook to maintain investor confidence. Traders will watch $131.32 as support and $148.48 as resistance, with a breakout potentially opening the way toward $160.
Arslan Ali Butt
Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)
Arslan Ali Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.
His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.
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