The world’s largest bond investor is preparing to back Oracle’s artificial intelligence expansion with a massive check. Pacific Investment Management Co. (Pimco) is in talks with Bank of America to arrange approximately $14 billion in financing for a single data center campus in Saline Township, Michigan, according to people familiar with the matter. This move signals deep institutional confidence in Oracle’s infrastructure thesis, even as the company’s aggressive spending spree reshapes its balance sheet.
Operational momentum remains powerful. For its third fiscal quarter ended March 10, 2026, Oracle reported revenue of $17.2 billion, a 22% year-over-year increase. Adjusted earnings per share came in at $1.79, surpassing analyst expectations. Cloud revenue was a standout, jumping 44% to $8.9 billion. The company highlighted this as its first quarter in over 15 years where both organic total revenue and adjusted EPS grew by more than 20% in U.S. dollars.
Financing the growth engine, however, carries a steep cost. Oracle’s long-term debt has ballooned to $124.7 billion, up from $85.3 billion at the end of the last fiscal year. Its free cash flow over a trailing twelve-month period has turned deeply negative, reaching -$24.74 billion. To continue funding its ambitions, the company plans to raise up to $50 billion through debt and equity.
The Michigan project, part of the broader “Stargate” initiative developed with OpenAI and Related Digital, exemplifies the scale of this investment. The 250-hectare campus, confirmed in October 2025, is designed to reach a capacity of one gigawatt. Total funding for the venture is set at $16.3 billion, with about 15% expected as equity. Investment firm Blackstone is anticipated to contribute around $2 billion, with the remainder to be raised through bonds, potentially in a private 144A offering.
This project is not an isolated case. Oracle is already involved in similar large-scale developments in Texas, Wisconsin, and New Mexico, with a combined debt volume of roughly $56 billion.
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Geographic expansion continues in parallel. On April 9, 2026, Oracle launched its first hyperscale cloud region in North Africa, located in Casablanca through a partnership with N+ONE Datacenters. This move supports Morocco’s “Digital Morocco 2030” strategy and extends Oracle’s global infrastructure footprint to provide local AI and cloud services.
Internally, the company is undergoing a significant transformation to align resources with its strategic priorities. In late March 2026, Oracle began cutting approximately 30,000 jobs worldwide, aiming to reallocate resources toward its AI and cloud businesses.
The staggering growth is most visible in Oracle’s backlog. Its Remaining Performance Obligations surged to $553 billion, a 325% increase from the prior year, driven largely by major AI infrastructure contracts. The central challenge for investors is pinpointing when this record backlog will convert into sustainable free cash flow.
Wall Street’s view is mixed. Cleveland Research downgraded the stock to Neutral on April 10. Mizuho Securities maintains an Outperform rating but lowered its price target from $400 to $320 in March, citing lower sector valuation multiples while remaining positive on Oracle’s Cloud Infrastructure (OCI). KeyBanc reaffirmed an Overweight rating with a $300 target. The broader analyst consensus sits between Moderate Buy and Strong Buy, with an average price target ranging from $245 to $261.
Management expects fourth-quarter earnings per share between $1.96 and $2.00. The stock, however, reflects the prevailing tension. Trading recently at €118.88 in Frankfurt, the share price is down about 29% year-to-date and sits roughly 36% below its 200-day moving average, underscoring the gap between operational strength and market valuation.
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