Key Points

Oracle plans to raise $40 billion through debt and equity triggered market concerns.
Remaining performance obligations hit a record $638 billion.
Shares dropped more than 12 percent following the earnings release.

Oracle stock took a sharp hit after the company released its fourth-quarter and full-year fiscal 2026 results. The software firm revealed plans to raise $40 billion via debt and equity, with only half of that amount previously disclosed. Free cash flow turned negative for the year, showing a cash burn of $23.7 billion.

Investors now face a key question: have expectations for technology firms grown unrealistic, or does this signal deeper issues for Oracle holders?

The quarter itself delivered solid results. The company posted record earnings per share along with record revenues and remaining performance obligations. Full-year revenues reached $67.4 billion, up 17 percent, while earnings per share rose 34 percent to $5.83.

Guidance for fiscal 2027 also looks positive. Oracle lifted its earnings-per-share target to $8.05 and kept its revenue forecast at $90 billion.

Spending is rising quickly. Capital expenditures ran above earlier guidance, and the fresh $40 billion commitment for 2027 unsettled some investors.

Even so, the large backlog of business suggests the steep drop may be an overreaction, much like the recent move in Broadcom shares after strong results missed elevated analyst targets.

Long-term holders can view the sell-off as a chance to buy rather than a cause for alarm, given that core fundamentals stay solid.