SAP stock dips after Oracle's massive AI spending plans

Investing.com -- Shares in SAP (NYSE: SAP) (ETR: SAPG) dropped more than 4% after rival Oracle (NYSE: ORCL) unveiled capital spending plans for fiscal 2027 that came in well above Wall Street expectations.

Oracle’s stock fell more than 10% in premarket trading Thursday after the company said it expects capital expenditures of up to $95 billion in fiscal 2027, though it anticipates recovering up to $25 billion of that from customer repayments. Analysts had been expecting capital spending of around $67.7 billion, according to LSEG data.

Oracle also said it plans to raise nearly $40 billion through a mix of debt and equity financing in 2027, including a previously announced $20 billion at-the-market equity issuance.

The figures underscore the enormous cash demands of competing at the frontier of AI infrastructure. Oracle, which has secured major data center contracts with customers including Meta Platforms and OpenAI, is positioning itself as a serious challenger to cloud leaders Amazon and Microsoft, and is increasingly spending at a comparable scale.

CFO Hilary Maxson told analysts that roughly $70 billion of the projected 2027 outlay represents Oracle’s own capital spending, with the remainder expected to be repaid by customers, though she did not specify a timeline for those recoveries. She also cautioned that gross margins would "step down" in the current fiscal year as the company accelerates its data center buildout.

Oracle’s spending has already been massive. The company spent around $55.7 billion in fiscal 2026, exceeding its own $50 billion target, and had earlier in the year flagged plans to raise up to $50 billion through debt and equity sales.

For the fourth quarter, Oracle reported revenue of $19.18 billion, slightly ahead of the $19.10 billion analysts had forecast. Adjusted earnings of $2.03 per share also topped the $1.96 consensus estimate.

Cloud services revenue reached $9.9 billion in the quarter, up 46% year-on-year in constant currency, while Oracle Cloud Infrastructure revenue surged 92% to $5.8 billion. Total software revenue edged down 2% in constant currency to $6.8 billion.

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