Alphabet's $80 Billion Share Sale Raises Stakes for Oracle's Pivotal Earnings Report

Oracle shares fall 1.2% as Alphabet's massive equity offering stokes AI cost fears, but Scotiabank's $290 price target and strong cloud positioning support long-term outlook.

Oracle shares slipped into Tuesday's session, giving back part of the prior day's nine percent surge, as Alphabet's blockbuster equity offering reverberated through the cloud computing landscape. The Google parent’s plan to raise $80 billion — its first share sale in over two decades — has injected a dose of uncertainty into a sector already bracing for Oracle’s fiscal fourth-quarter results on June 10. Yet even as the stock dipped 1.2 percent to €210.30, Scotiabank stepped in with a sharply higher price target of $290, signaling that the long-term thesis remains intact.

Alphabet announced on June 2 that it would issue $80 billion in new shares, with Berkshire Hathaway taking a $10 billion tranche at a discounted price and another $30 billion slated for placement through investment banks. The funds are earmarked for an aggressive push into AI infrastructure, adding to an already elevated capital expenditure plan of up to $190 billion for the current year. The sheer scale of the offering has stoked fears that capital costs across the AI ecosystem could climb, putting pressure on suppliers and adjacent software vendors like Oracle. The stock had rallied more than 36 percent in the month leading up to the announcement, making the pullback a stark reminder of how quickly sentiment can shift.

Scotiabank’s upgrade counters that headwind head-on. The bank lifted its Oracle price target from $215 to $290 and maintained a "Sector Outperform" rating, betting that the company's own infrastructure spending is poised to accelerate. Analysts now expect Oracle’s investment budget for fiscal 2027 to approach $100 billion — well above current consensus — factoring in roughly 15 percent hardware inflation. On the cost side, the ongoing reduction of 11,000 jobs should deliver annualized savings of about $800 million. Scotiabank’s conviction rests on Oracle’s positioning in the AI cloud fray, citing its GPU-as-a-service capabilities, access to capital, and vendor-neutral stance. Management has confirmed that data center expansions are running "on schedule or better."

The options market, however, is flashing two very different signals ahead of the earnings release. Unusually heavy put activity has surfaced: more than 10,000 contracts at a $190 strike price expiring June 26 changed hands — nearly 50 times normal volume — suggesting some traders are bracing for a post-earnings pullback. That contrasts sharply with the prior day’s picture, when the put/call ratio stood at 0.29 versus a typical 0.39, indicating a predominantly bullish stance. Implied volatility over the next 30 days has climbed to around 85.5 points, implying an expected swing of more than 14 percent around the results. Over the past four quarterly reports, Oracle’s stock has moved an average of 7.3 percent.

The fundamentals provide a sturdy backdrop for either outcome. In the fiscal third quarter, Oracle delivered earnings per share of $1.79, beating the consensus estimate of $1.70, on revenue of $17.2 billion — an organic growth rate above 20 percent. Cloud infrastructure revenue surged 84 percent to $4.89 billion, while total cloud revenue hit $8.9 billion, up 44 percent. The standout metric remains the remaining performance obligations, which ballooned to $553 billion, a 325 percent year-over-year jump driven by large-scale AI contracts. Notably, customers are financing the bulk of the required hardware themselves through prepayments or by providing their own GPUs.

Guidance for the just-completed fourth quarter, set to be released after U.S. markets close on June 10, calls for revenue growth of 19 to 21 percent and cloud revenue expansion of 46 to 50 percent. Non-GAAP earnings per share are expected between $1.96 and $2.00. For the full fiscal year 2026, Oracle maintains a revenue target of $67 billion, with the bar already set at $90 billion for fiscal 2027. The upcoming report will serve as the first real check on that trajectory. The stock, which has gained roughly 45 percent over the past twelve months, still sits about 25 percent below its 52-week high of €280.70, leaving plenty of room for a re-rating — or a sharp correction — depending on what the numbers reveal.