Oracle Corporation is making a massive, debt-fueled wager on artificial intelligence, underpinned by a staggering $553 billion backlog of customer commitments. This audacious strategy, designed to catapult the software giant to the forefront of the AI infrastructure race, is drawing both bullish enthusiasm and sharp scrutiny from Wall Street.
The company’s stock recently traded around 152.50 euros, marking a significant climb of nearly 15 percent over the past month. This rally reflects investor optimism around operational milestones, yet the share price remains well below its 52-week high of over 280 euros. The stock’s extremely low RSI reading of 19.4 underscores the severe pressure it faced before this recent recovery.
A key driver of this optimism is Oracle’s deepening cloud alliance with Amazon Web Services. The two tech giants plan to directly interconnect their cloud infrastructures by 2026, starting in the AWS US East region. This partnership will enable corporate clients to run business systems on one cloud and seamlessly shift AI workloads or analytics to the other, using high-speed connections of up to 100 gigabits per second with automatic redundancy. Oracle promises no data transfer fees for this service, charging only for port usage.
Financially, Oracle’s cloud business is showing explosive growth. Total revenue recently reached $17.2 billion, with cloud revenue surging 44 percent year-over-year. The infrastructure segment was particularly strong, posting growth of 84 percent to reach $8.9 billion.
Should investors sell immediately? Or is it worth buying Oracle?
However, the sheer scale of Oracle’s ambition introduces substantial risk. To fulfill its monumental $553 billion order backlog—which includes major AI contracts with Meta, xAI, and OpenAI—the company is embarking on a historic capital expenditure program. Planned investments for the fiscal year amount to roughly $50 billion, pushing free cash flow deep into negative territory and swelling total debt beyond $100 billion. This massive leverage makes the company highly sensitive to interest rate expectations and any potential cooling in AI demand.
Analyst sentiment captures this dichotomy perfectly. While the consensus rating among 35 covering analysts remains “Buy” with an average price target of $261, individual targets reveal wide dispersion, ranging from $155 to $400 per share. Several firms, including Deutsche Bank, Jefferies, Morgan Stanley, and Mizuho, have recently trimmed their targets, citing pressure on software valuations and the high capital intensity of AI infrastructure. Others, like Bernstein, Citi, and JPMorgan, maintain positive stances, pointing to solid quarterly results and a strong outlook for fiscal 2027.
The path forward hinges entirely on flawless execution. Oracle notes that many large projects are funded by customer prepayments or involve clients bringing their own GPUs, which mitigates some capital risk. Yet any delay in major deployments, such as OpenAI’s recent decision to pause expansion of its Texas-based “Stargate” project to await newer Nvidia chips, could disrupt revenue recognition and quickly refocus attention on the company’s debt-laden balance sheet.
The ultimate test will be whether this record backlog and strategic cloud partnership can translate into sustained revenue growth. The answer will begin to materialize with Oracle’s fourth-quarter results and the speed at which enterprise clients adopt its new AI agents for human resources, finance, and supply chain management.
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