Pimco, BofA Line Up $14B to Back Oracle’s (ORCL) AI Data Center Buildout

Pacific Investment Management Co. (Pimco) is reportedly in early talks with Bank of America (BAC) to help fund a massive data center project in Michigan for tech giant Oracle (ORCL). The deal could involve around $14 billion in debt financing for a site in Saline Township, which is expected to support OpenAI’s applications. According to Bloomberg, the financing may be set up as a bond deal, with Pimco possibly selling parts of that debt to other investors.

Importantly, the project has already attracted strong interest due to its size and importance. For instance, Bank of America has been working for months to put together the financing for Related Digital, the developer behind the project. In addition, Blackstone (BX) is expected to invest about $2 billion in equity. Although the companies involved have not officially commented, Oracle said it is making strong progress and continues to work with partners like OpenAI, Related Digital, and Bank of America.

Interestingly, the financing could use a structure called a 144A bond, which allows large investors to trade the debt privately. For Pimco, this would be another major data center deal, following its recent role in helping fund Meta’s (META) Hyperion project, where it held $18 billion in debt and later saw strong gains. Meanwhile, Oracle has already secured huge funding deals for other data centers, including $38 billion in Texas and Wisconsin and $18 billion in New Mexico. Because of these large projects and rising costs, Oracle has also appointed a new CFO to help manage its expanding plans and capital needs.

Is ORCL Stock a Good Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on ORCL stock based on 27 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average ORCL price target of $245.11 per share implies 71% upside potential.