Following an initial dip, Oracle (ORCL) stock saw a 3% rise after Fitch Ratings affirmed its BBB credit rating. The software giant had previously announced plans to issue $45-50 billion in debt, causing some investor concern. Fitch's affirmation of the rating reassured the market, despite the substantial debt offering for AI infrastructure investments.

Oracle intends to use the proceeds from its bond offering for general corporate purposes, including capital expenditures and potential acquisitions. This large fundraising is largely tied to high spending on AI compute infrastructure, supporting contracts with leaders like OpenAI and Meta. Investors closely watch Oracle's financial health, especially given the company's growth strategy.

Fitch anticipates Oracle's EBITDA leverage will exceed 3.5x in fiscal 2026, followed by a decline in 2027-2028. The rating agency projects negative pre-dividend free cash flow exceeding $26 billion in fiscal 2026. With approximately $20 billion in cash, Oracle's ability to manage its debt and investments remains a key focus.

This matters because Oracle's creditworthiness impacts its ability to borrow affordably and fund its ambitious AI-related expansion. The market will be watching the company's execution of its AI strategy and its ability to generate returns on these significant investments. The debt offering is a key part of Oracle's growth plan.