Oracle delivered one of the strongest quarters in its history and was punished for what it will cost to keep growing: shares fell about 13% on Thursday after the company said it expects to raise roughly $40 billion in debt and equity next year to fund an artificial intelligence infrastructure build-out that has pushed capital spending far beyond projections.

Fourth-quarter revenue rose 21% to a record $19.2 billion, with total cloud revenue up 47% to $9.9 billion. Oracle Cloud Infrastructure, the unit racing to supply computing capacity to AI companies, grew 93% to $5.8 billion, while cloud applications revenue rose 10% to $4.1 billion. Non-GAAP earnings of $2.11 per share rose 24% and beat Wall Street expectations.

For the full fiscal year, revenue climbed 17% to $67.4 billion and cloud revenue rose 39% to $34.0 billion.

The number that defined the report, however, was remaining performance obligations — contracted future revenue — which reached $638 billion, up 363% from a year earlier and $85 billion higher than the previous quarter. Most of the increase came from large-scale AI contracts in which customers prepaid Oracle for capacity, the company said.

Converting that backlog into delivered computing requires extraordinary spending. Capital expenditures hit $15.9 billion in the fourth quarter alone, taking the full-year total to $55.7 billion — above the company's own projections. To keep building, Oracle said it expects to raise approximately $40 billion in fiscal 2027 through a combination of debt and equity.

That disclosure turned a record earnings report into a referendum on the economics of the AI infrastructure race. Investors have grown increasingly wary of cloud providers whose AI revenue arrives years behind the capital required to win it, and Oracle's announcement landed in a market already rattled by war-driven inflation and rising rates.

The quarter also deepened Oracle's entanglement with the AI companies driving its backlog: OpenAI said Thursday that its models and its Codex coding tools can now be purchased through Oracle cloud commitments, extending a relationship that already spans the companies' massive data-center partnership.

Oracle stock remains among the best performers of the AI era even after Thursday's drop, but the selloff signals a shift in what investors demand from the infrastructure build-out: not just contracted demand, but a credible path to funding it without diluting shareholders or straining the balance sheet.