Oracle Just Promised $30 Billion in Free Cash Flow After Capping New Borrowing at $20 Billion
Oracle spent its way into negative free cash flow territory and watched its stock lose half its value, but at its Las Vegas investor day it drew a hard line on future borrowing and put a specific date on a…
Oracle (NYSE:ORCL | ORCL Price Prediction) burned through a large amount of cash last year. On Oct. 28, 2026, at its Investor Day in Las Vegas, it gave a date for when that stops. Oracle forecast free cash flow of $30 billion or more for fiscal 2029, which ends May 2029. It also said free cash flow should turn positive in the second half of fiscal 2028.
Free cash flow is the cash left over after operating costs and capital spending. Oracle’s free cash flow was negative $23.7 billion in fiscal 2026 after it spent $55.7 billion on data centers. In fiscal 2025, the figure was only-$394 million.
Investors welcomed the cap, sending shares up 10.73% to $144.54 before a 2.44% after-hours slip to $141.01. That rally leaves shares about 49% below its 52-week high of $285.46.
What Oracle Committed To and What It Forecasts
The firm commitment is the cap. Oracle limited new financing (debt and equity) at $20 billion through fiscal 2030: $10 billion in equity and $10 billion in gross debt. Refinancing of existing debt is excluded, and the cap comes on top of the $20 billion stock sale Oracle finished in the first quarter of fiscal 2027. Chief Financial Officer Hilary Maxson said, “I’ve told you we need an additional up to US$20-billion in funding for the remainder of our fiscal 2027,” and called it “the final amount needed to fund the remainder of this cycle.”
The $30 billion figure is a forecast. Oracle also kept its fiscal 2030 targets from October 2025: at least $225 billion in revenue, a non-GAAP operating margin of at least 40% and non-GAAP EPS of at least $21. The plan came out in a press release. The most recent SEC filing on record is still the September 10, 2026 8-K.
Three Levers That Have to Move Together
Getting to the target requires capital spending to fall, contracted revenue to turn into cash, and margins to expand. Oracle says capex peaks in fiscal 2027 and 2028, after guiding to $90 to 95 billion in capex this year.
Conversion looks like the sturdiest driver. Remaining performance obligations, which are signed contracts not yet billed, reached $664B, and Oracle expects around half to convert into sales over 36 months.
Financing is the weakest driver. Vendor financing, customer-supplied hardware, and prepayments cut Oracle’s upfront cash needs, but they shift obligations onto partners and leave Oracle more dependent on a handful of large AI buyers. If AI demand cools, that dependence becomes the risk.
Leverage stays high in the meantime. Oracle carried $125.34 billion in borrowings against $36.37 billion in cash and is targeting net debt below 3.5 times adjusted EBITDA in fiscal 2029.
Why Other AI Cloud Stocks Rallied Too
Other AI cloud stocks gained between 2.1% and 5%. Investors took the plan as a sign that one of the largest buyers of AI capacity can keep spending without breaking its balance sheet, which is also why the power, cooling, and networking suppliers behind the data-center expansion keep showing up in our free report on seven AI infrastructure stocks that aren’t chipmakers.
The cap addresses the two biggest concerns: unlimited dilution and unlimited debt. However, the $10 billion equity half still means more shares are coming.
What Oracle’s Cash Cap Means for Shareholders Before Fiscal 2029
The investment case for ORCL now rests on whether Oracle reaches its fiscal 2029 cash-flow forecast. The cap limits how far the story can get worse, and the stock still trades far below where it was before the cash-burn worries hit.
Credibility is the real concern, because the fiscal 2030 targets were followed by a long stock slide. The difference now is a hard limit on outside money, which investors can check far more easily than a revenue goal.
Oracle has said its fiscal second-quarter report should come in December but has not confirmed a date. Look for capex tracking toward guidance and quarterly free cash flow improving from NEGATIVE $5.396B.
The thesis breaks if Oracle raises money beyond the $10 billion equity and $10 billion debt limits. It also breaks if the stock falls toward its 52-week low of $114.50.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
