Oracle has declared that in a bid to bolster the expansion of its AI operations, it anticipates a substantial hike in capital expenditures, with an additional $15 billion expected to be spent in the fiscal year 2026. This upward revision stems from a surge in unpaid contractual services owed by customers. During the quarter that concluded on November 30, the company's contract backlog ballooned by $68 billion, bringing the total to a staggering $523 billion. This remarkable growth was predominantly propelled by commitments from tech giants Meta and Nvidia. In the same quarter, Oracle also faced restructuring costs amounting to $406 million, marking a staggering 387% year-on-year increase.

From a financial standpoint, Oracle posted revenue of $16.1 billion, representing a 14% year-on-year rise, accompanied by a 91% surge in earnings per share. Notably, cloud revenue witnessed growth across all business segments. However, investors have raised red flags over the company's substantial debt increase to fuel AI development. This concern has triggered a sharp decline of over 11% in Oracle's stock price during after-hours trading. The stock also exhibited significant volatility in November, prompting Morgan Stanley to issue a recommendation to short its shares. During the earnings call, the Chief Financial Officer sought to reassure investors by highlighting that the company boasts a diverse array of financing channels. Furthermore, the company is exploring financing options for customers who opt to bring their own chips for installation, a move aimed at minimizing borrowing.