Oracle (ORCL) shares fell in after-hours trading after the company reported its fourth-quarter and full fiscal year 2026 results, despite posting record revenues across key metrics.
The tech giant reported Q4 total revenues of $19.2 billion, representing a 21% increase in USD terms, while non-GAAP earnings per share grew 24% to $2.11 for the quarter.
Cloud Infrastructure revenue surged 93% during the period, and Remaining Performance Obligations grew by $85 billion in Q4 alone, pushing the total backlog from $553 billion to $638 billion.
Despite those headline beats, investor attention quickly shifted to Oracle’s capital expenditure disclosures, which revealed spending well beyond original projections for the fiscal year.
Oracle spent $15.9 billion on capital expenditures in the final quarter of its fiscal year, pushing full-year capex to $55.7 billion and surpassing its original $50 billion projection for fiscal 2026.
The company’s long-term debt stood at approximately $125 billion exiting the most recent quarter, while trailing-12-month free cash flow swung deeply negative as Oracle poured capital into data center buildouts.
Wall Street has increasingly treated Oracle as a key barometer for AI-related credit risk, given the company’s aggressive borrowing strategy to fund artificial intelligence infrastructure development.
Cloud rivals including Alphabet and Amazon are funding their AI buildouts primarily through internal cash flow, while Oracle has relied more heavily on debt financing to support its expansion.
Oracle’s stock declined harder than the broader market, which was already under pressure after chipmaker Broadcom issued a disappointing earnings forecast that dragged the Philadelphia Semiconductor Index down 9.1% and sent the Nasdaq 100 nearly 5% lower.
OpenAI, led by Sam Altman, signed a $300 billion five-year deal with Oracle in 2025, making the AI startup one of Oracle’s most strategically important customers heading into fiscal 2027.
For fiscal year 2027, Oracle confirmed prior revenue guidance of $90 billion in total revenue and raised its non-GAAP EPS guidance to $8.05, representing projected growth of 18%.
The raised guidance did little to immediately calm investor nerves, as the sheer scale of ongoing capital commitments continued to overshadow the company’s otherwise strong operational performance.
