Ahead of Oracle's upcoming financial analyst meeting, Evercore ISI estimates the company will need between $50 billion and $60 billion in additional funding before its free cash flow turns positive in fiscal 2029. The firm's analysts argue that how Oracle explains its plan to close that gap will shape investor confidence more than any other single disclosure.
Why the Funding Question Matters
Oracle has already forecast capital expenditure of $90 billion to $95 billion for fiscal 2027, a figure driven largely by the buildout of data centers to support Oracle Cloud Infrastructure (OCI) and AI workloads, including commitments tied to OpenAI. Evercore says investors are less concerned about the scale of spending itself than about where the money will come from and whether it will strain Oracle's balance sheet. Analysts specifically want detail on customer-funded projects, alternative financing structures such as joint ventures or off-balance-sheet vehicles, and whether any data center construction timelines face delays.
How Evercore Values the Pieces
Using a sum-of-the-parts analysis, Evercore calculates that Oracle's software and non-AI cloud operations alone are worth roughly $197 per share on a debt-adjusted basis. By contrast, the firm estimates the market is currently assigning a negative value to Oracle's AI cloud infrastructure business, reflecting skepticism about execution risk and the uncertainty surrounding how future buildouts will be financed. That disconnect, Evercore suggests, is the core reason Oracle shares have lagged despite strong demand signals for its cloud infrastructure.
What Investors Will Watch For
Beyond financing mechanics, Evercore flagged the importance of clarity around Oracle's remaining performance obligations - contracted revenue the company has booked but not yet recognized - particularly when isolating figures tied to OpenAI from the rest of the business. Analysts also want a clearer growth outlook for Oracle's core software segment, which has historically been the more predictable and profitable part of the company. Evercore maintained its $245 price target, saying that concrete answers on funding sources and realistic data center delivery schedules could help close the valuation gap between Oracle's cloud ambitions and how the market currently prices them.