Oracle's AI Spending Bill Keeps Growing: Capex Could Hit $100 Billion As Stargate Expands

Oracle Corp (NYSE:ORCL) stock slid on Friday as investors grew more cautious about the company’s debt-funded AI infrastructure spending.

Pre-earnings profit-taking and a broader tech selloff, which weighed on the Nasdaq and S&P 500, also added pressure.

BNP Paribas analyst Stefan Slowinski remains bullish on Oracle, keeping an Outperform rating and a $283 price forecast, while expecting the company’s fiscal 2027 capital spending outlook to take center stage when it reports fiscal fourth-quarter results.

Slowinski Expects Oracle To Reaffirm Growth Targets

Slowinski said Oracle continues to make progress on its cloud infrastructure strategy, with financing concerns partly addressed through bring-your-own-cloud arrangements, customer prepayments, and OpenAI’s $122 billion fundraising to support compute needs.

The analyst expects Oracle to deliver a broadly in-line fiscal fourth quarter, including OCI growth near the 92% consensus estimate.

He also expects first-quarter fiscal 2027 guidance to bracket consensus expectations for 27% revenue growth and $1.69 in adjusted EPS, while Oracle reiterates its fiscal 2027 revenue guide of $89 billion.

Capex Outlook Becomes The Key Watch Item

Slowinski expects Oracle’s fiscal 2027 capital expenditure guidance to land between $80 billion and $100 billion as the company accelerates development of non-Abilene Stargate campuses.

BNP Paribas raised its fiscal 2027 capex estimate to $83 billion from $72 billion, above the consensus of about $60 billion.

The analyst said higher spending could reflect newer-generation NVIDIA Corp (NASDAQ:NVDA) GPUs and broader inflation, with several Stargate sites expected to see first deliveries in the second half of calendar 2026 or the first half of calendar 2027.

New CFO And Non-OCI Trends Add Uncertainty

Slowinski said fiscal fourth-quarter results will be Oracle’s first under new CFO Hilary Maxson, creating some uncertainty about whether the company will adopt a more conservative guidance approach after a 70% share-price rebound from April lows.

He also said BNP Paribas’ April software reseller checks showed softer trends for Oracle outside OCI, particularly in database and SaaS. However, he noted that the survey has less visibility into OCI due to OpenAI’s exposure.

Valuation Still Supports Outperform Rating

Slowinski said BNP Paribas values Oracle at 30 times fiscal 2028 non-GAAP EPS, discounted back, because it sees greater visibility into Oracle’s fiscal 2028 earnings outlook.

He said investors will also watch for updates on headcount after the company’s reduction-in-force, the timing of a previously announced $20 billion at-the-market equity issuance, and whether Oracle waits until investor day to update its 2030 outlook for new capex and financing assumptions.

ORCL Price Action: Oracle shares were down 8.65% at $215.90 at the time of publication on Friday, according to Benzinga Pro data.

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