Oracle Corporation's stock experienced a significant rebound on Monday, climbing 9.7% to close at $156.59. The surge followed an upgrade from D.A. Davidson, which moved its rating to "buy" based on diminishing worries about the company's financial ties to OpenAI.
Major Capital Raise on the Horizon
This positive momentum arrives as Oracle prepares for a substantial capital raise. The technology firm disclosed plans to secure between $45 billion and $50 billion in gross proceeds during the 2026 calendar year. The strategy involves a combination of debt issuance and equity, including an at-the-market share program targeting up to $20 billion.
The broader technology sector is witnessing similar moves, with companies aggressively funding artificial intelligence infrastructure. This trend was highlighted by Alphabet's $20 billion bond issuance on the same day, following Oracle's own $25 billion debt sale earlier in the month.
Diverging Analyst Views
Not all analysts share the optimistic outlook. Melius Research downgraded Oracle to "hold" from "buy," maintaining a $160 price target. The firm expressed concerns about cash flow generation and intensifying competition in the AI space from rivals like Anthropic and Google.
D.A. Davidson's Gil Luria countered these concerns, suggesting the market has over-penalized Oracle for its OpenAI relationship. He noted that a "revamped OpenAI" with significant capital reserves—reportedly up to $40 billion on hand with potential for $100 billion more—should reliably meet its obligations to Oracle.
Market Context and Future Catalysts
The partnership with OpenAI has been a key driver of Oracle's stock volatility. A previously reported agreement involves OpenAI committing to purchase approximately $300 billion worth of computing capacity from Oracle over a five-year period. Investors are closely monitoring how quickly such deals translate into recognizable revenue against Oracle's upfront infrastructure investments.
Traders are now focused on execution details: the pacing of the equity program, market capacity for additional debt, and customer deployment timelines. Oracle's upcoming earnings report, expected around March 9, will be a critical event for providing clarity on cloud demand, capital expenditure, and funding progress.
Other AI-related stocks also moved higher, with Microsoft gaining 3.1% and Nvidia advancing 2.4% during the session, reflecting the sector's ongoing sensitivity to sentiment shifts around AI investment returns.
