Salesforce Moves to Calm Investors as Oracle Stock Surges 10%

Salesforce is planning to sell up to $25B of debt to fund the share buyback that it announced in its Q4 and FY26 call. This marks the company’s biggest-ever note sale. 

This comes as Oracle recently announced its own strong earnings results, with shares gaining almost 10% in extended trading, and prompts questions around the company’s positions in both the AI race and the ‘SaaSpocalypse’.  

Salesforce’s Plan to Soothe Investors

In the company’s latest earnings call, Salesforce revealed that it returned $14.3B to shareholders, including $12.7B in share repurchases and $1.6B in dividends. Alongside this, it also announced a new $50B share buyback program, replacing all previously unused authorizations.

Now, the tech giant is selling $25B of debt to fund this buyback. The offering is expected to close on March 13, 2026, subject to the satisfaction of customary closing conditions.

Salesforce will use all net proceeds from the offering to repurchase $25B of its common stock through accelerated share repurchase (ASR) agreements with financial institutions, executed immediately after pricing.

The company has also mandated JPMorgan, Bank of America, Barclays, Citigroup, and Wells Fargo to serve as joint book-running managers for the offering of the notes.

Companies often use a debt-funded buyback or leveraged buyback to increase different metrics such as earnings per share (EPS), but it does not signify an improvement in underlying performance or value. 

Since the global financial crisis of 2008, buybacks have become a favored tool on Wall Street. This is unsurprising, given that financial markets have often rewarded companies that use buybacks as a substitute for actual operational performance improvement. 

SF Ben has reached out to Salesforce for comment. 

Oracle Soars Ahead in the ‘SaaSpocalypse’

News of Salesforce’s alleged funding plans comes amid exemplary earnings results from competitor Oracle. Revenue increased 84% to $4.9B in the period ended February 28, and this marked a quicker jump than the 79% anticipated by analysts and a 68% sales rise in the previous quarter. Oracle’s stock also shot up by nearly 10% in extended trading. 

In Q3, Cloud application revenue hit $4B, which is up 13%. Not only that, Q3’s Fusion Cloud ERP revenue hit $1.1B, which is up 17%. Two strong markers for Oracle’s SaaS strategy, and a real indicator that Oracle has clearly begun to understand what a company needs to do to succeed in the ‘SaaSpocalypse’. 

The company outlook also suggested a promising future both within Oracle’s AI arm of the business and its larger SaaS offering, with the software firm working hard to deliver on sizeable cloud infrastructure contracts with customers like Meta and OpenAI. Cloud capacity for AI is rapidly being delivered, with 90% of the quarter’s deliveries meeting or exceeding the scheduled timeframe.

However, this does come shortly after news of alleged planned mass layoffs at Oracle came to light, with the job cuts reported to potentially be in the thousands. 

The Competition Intensifies 

It is very likely that Salesforce hopes this buyback scheme is able to soothe the concerns of investors and stakeholders, especially as their stock has taken a considerable tumble over the last year.

The $50B share repurchase program (potentially half covered by the debt sales) will divert cash flow and work to make the stock more enticing, and shows that the cloud giant is consciously thinking about how to get back into Wall Street’s good books. 

“I’ve watched many boards hide behind buybacks for years,” wrote financial expert and TEDx speaker Jim Osman on LinkedIn. “It is the fastest way to look decisive without actually changing the business.”

“A shrinking share count does not fix a shrinking opportunity set. It just improves the optics. Markets know the difference.”

In a CNBC interview yesterday, the conditions of the buyback were discussed, calling this move part of the “playbook of IBM and old Oracle”, and “not a company that is pioneering in AI.” Could this be more of an effort to cement the idea that Salesforce is still a golden SaaS company?

Over on Oracle’s side, these latest earnings will have undoubtedly settled some tensions surrounding the company and its position within the new AI SaaS marketplace. With multiple high-value, high-stakes AI cloud partnerships in the pipeline and an equally turbulent stock, the pressure to prove that Oracle is a leader in the field has been immense, and it seems as if the company’s efforts have begun to pay off. 

This has pushed Oracle forward in the AI SaaS race, and it is likely that Salesforce is paying close attention.

Final Thoughts 

We have once again been shown that the AI SaaS race is incredibly ruthless, with Salesforce feeling the pressure and Oracle finally finding relief in their stronger-than-predicted results. 

Whether Salesforce’s efforts actually soothe investors or not will take time to determine.