Oracle has secured a $638 billion backlog of future revenue driven by high demand for its artificial intelligence infrastructure.

Oracle has amassed a massive $638 billion backlog of remaining performance obligations, representing a significant contractual promise of future revenue. This mountain of work is primarily fueled by strong demand for the company's artificial intelligence infrastructure and database services. While the cloud infrastructure revenue grew by 93% in the most recent quarter, the company faces a high-stakes execution challenge. To fulfill these promises, Oracle is undertaking a capital-intensive expansion, with an expected net cash outlay of approximately $70 billion in the next fiscal year. The company plans to raise $40 billion in debt and equity to support this growth. Although the stock has fallen 42% over the past year, investors are weighing the potential for generational growth against the risks of a debt-heavy expansion. Market analysts are currently monitoring the company's gross margins as it begins to recognize this new revenue. The high implied volatility suggests that traders are bracing for significant price swings as the company executes its ambitious build-out.

Sources