Oracle shares jump on free cash flow timeline, funding cap

Oracle ↘ 2.98% shares rose sharply on Wednesday, October 28, after the company gave investors a date for when free cash flow turns positive and capped how much new money it will raise for its AI buildout. At its Investor Day in Las Vegas, Oracle said it expects fiscal 2030 revenue of $225 billion or more, which works out to compound annual growth above 35% from fiscal 2026. It also targeted a non-GAAP operating margin above 40% and non-GAAP earnings per share of at least $21.investor.oracle.com

The revenue and EPS targets were first announced at Oracle's analyst meeting on October 16, 2025, and the stock fell about 7% the next day. This year, the cash flow plan is what moved the stock. Shares rose more than 9%, according to Seeking Alpha, and CNBC reported a jump of about 10%.cnbc.com+2

A timeline for cash flow

CFO Hilary Maxson said free cash flow should turn positive in the second half of fiscal 2028 and top $30 billion in fiscal 2029 as capital spending falls, Reuters reported. According to Bloomberg, investors had expected free cash flow to still be negative that year.centraloregondaily.com+1

Oracle said it will raise no more than $20 billion in new capital through fiscal 2030, not counting debt refinancing. The current plan is $10 billion in equity and $10 billion in gross debt. That comes on top of the $20 billion at-the-market stock sale finished in the first quarter of fiscal 2027. The company said growth will pay for itself starting in fiscal 2029, and that net debt will fall below 3.5 times adjusted EBITDA that year. Oracle also kept its fiscal 2027 outlook of at least $90 billion in revenue and $8.10 in non-GAAP EPS.investor.oracle.com

Investors wanted funding limits

The stock went into the event under pressure. It had fallen about 34% since the start of the year and roughly 55% over the past 12 months, Business Insider reported. Investors have worried about who pays for the AI data center boom. Before the meeting, Wells Fargo ↗ 1.69% analyst Michael Turrin wrote that the "path to (fiscal year 2030) targets remains under scrutiny," Investor's Business Daily reported. Evercore ISI's Kirk Materne said the biggest opportunity was to "put some guardrails around how much additional funding Oracle needs before turning free-cash-flow positive." Goldman Sachs The Goldman Sachs Group, Inc. ↗ 0.11% cut its price target to $206 on October 23 and questioned whether the targets for fiscal 2028 through 2030 can be reached.finance.yahoo.com+2

Demand has not been the issue. Oracle's backlog of signed but not yet recognized revenue is about $664 billion, according to RBC analysts. Still, Reuters noted that Oracle lacks the large revenue base of Microsoft ↗ 0.29% and Amazon Amazon.com, Inc. ↘ 4.95%, and that it depends heavily on one customer, OpenAI, which is losing money.markets.businessinsider.com+1