Oracle’s €638 Billion Promise Collides With a €23.7 Billion Cash Drain
12.06.2026 - 15:32:04 | boerse-global.de
The technology sector has rarely produced a starker split between future demand and present-day pain. Oracle just posted an order backlog that now exceeds its own market capitalisation, yet the shares have shed nearly 15% in the past seven days, trading at €158.82 — barely a whisker below the 50-day moving average of €158.89. The disconnect stems from a brutal arithmetic: building the infrastructure to service those orders is costing far more than the company is generating in cash.
Investors got a close look at that equation on 10 June 2026, when Oracle reported that remaining performance obligations — the contracted but unfulfilled revenue — had swelled to a record €638 billion, up 363% year-on-year. That backlog alone is worth more than Oracle’s entire equity, valued at roughly €513 billion. But the price of capturing that business is front-loaded. Capital expenditure for the fiscal year just ended hit €55.7 billion, driving free cash flow to a negative €23.7 billion. No wonder the market is running for cover.
The financing plan for the year ahead has only deepened the sell-off. Oracle intends to pour €95 billion in total investments into its cloud and AI infrastructure. To fund that, management will raise about €40 billion through a mix of new debt and equity — a dilution warning that sent the stock sliding 43.42% from its 52-week high of €280.70. The real worry is not that demand is missing; it is that the margin between Oracle’s colossal spending and eventual profit recognition will remain negative for some time.
Should investors sell immediately? Or is it worth buying Oracle?
Amid the financial strain, there are strategic bright spots. Oracle’s new partnership with OpenAI lets customers tap GPT-5.5 and Codex using existing Oracle Universal Credits, effectively turning dormant cloud commitments into live AI compute. The cloud infrastructure unit, OCI, grew 93% last quarter to €5.8 billion in sales. The US government also handed Oracle a nearly $400 million contract to modernise personnel systems. The quarterly top line hit $19.2 billion, up 21% year-on-year, underscoring the strength of the underlying business.
Technically, the stock is trying to stabilise after a volatile six months. The 30-day annualised volatility sits at 69.75%, and the relative strength index of 42.1 points to neither oversold nor overbought conditions. The gap to the 200-day moving average of €176.66 is still about 10%, suggesting further recovery may require more than just backlog optics. The consensus price target of €220.58 implies nearly 39% upside, but that optimism hinges on Oracle turning its €638 billion backlog into real, cash-positive revenue without stretching the balance sheet further.
What Oracle has become, in effect, is a pure bet on the physical reality of the AI boom. Demand is undeniable. But the factories needed to satisfy it are testing the patience of even the most committed shareholders. The next quarterly update will offer the clearest signal yet on whether the cash-flow trough is finally behind the company.
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