Oracle's Record $19.2 Billion Revenue Quarter Overshadowed by $90 Billion Capex Plan
13.06.2026 - 16:04:26 | boerse-global.de
Oracle delivered what should have been a quarter for the history books, and the market sent the stock down 14.17% in a single week. The disconnect stems not from what the company achieved, but from what it plans to spend to stay ahead in the AI arms race.
Revenue climbed 21% to $19.2 billion in the fourth quarter of fiscal 2026, with cloud revenue leaping 47% to $9.9 billion. Adjusted earnings per share came in at $2.11, beating the consensus estimate of $1.96. The remaining performance obligations swelled by $85 billion to $638 billion — a backlog that would take most companies years to fulfill.
Four individual customers each contracted more than $8 billion in the quarter alone, and overall GPU utilization hit 97.5%. By any conventional measure, the quarter was a triumph.
But investors fixated on the price tag for the next act. Oracle plans to pour between $90 billion and $95 billion into capital expenditures in fiscal 2027, including net cash outlays of roughly $70 billion. To fund that, the company will tap customers for $20 billion to $25 billion in prepayments and raise $40 billion from new debt and equity — half of that through an already announced $20 billion share placement.
Should investors sell immediately? Or is it worth buying Oracle?
The arithmetic is daunting. In fiscal 2026, Oracle already took on $43 billion in debt and $5 billion in equity. Free cash flow was negative $23.7 billion. CFO Hilary Maxson described the spending as necessary to accelerate the conversion of the backlog into revenue, but the market is demanding proof that the strategy will pay off before the debt burden becomes unmanageable.
On June 11, the day after results were released, shares dropped 8.53%. The selloff extended through the week as analysts and investors digested the scale of the infrastructure bet.
Wall Street Divided, But Predominantly Bullish
The analyst community is largely unfazed by the rout. Guggenheim reiterated a $400 price target, calling the selloff unjustified. Bernstein raised its target and kept an outperform rating, noting that the company is on track toward its 2030 goals without major hurdles. The consensus price target of roughly $220 implies about 39% upside from Friday's close of $159.18.
Yet not everyone is convinced. Scotiabank cut its target, arguing that the capex guidance for 2027 exceeded expectations without a commensurate increase in revenue forecasts. Morningstar flagged customer concentration as a key risk: Bank of America estimates that more than 50% of the backlog comes from a single relationship with OpenAI.
That concentration is a double-edged sword. It has turbocharged Oracle's cloud infrastructure business, but any unraveling of the partnership would leave a gaping hole in the order book. The optimistic scenario presupposes that AI demand becomes truly ubiquitous, allowing Oracle Cloud Infrastructure to convert every booking into cash.
Oracle at a turning point? This analysis reveals what investors need to know now.
Technical Picture Shows Strain
The stock closed the week at $159.18, barely above its 50-day moving average of $158.89 — practically sitting on support. The 200-day average of $176.66 lies about 10% higher, indicating the shares are well below the longer-term trend. The relative strength index of 42.4 suggests slightly oversold conditions but not a definitive reversal signal. Annualized 30-day volatility of 69.75% underscores how violently the market is repricing AI infrastructure plays.
For fiscal 2027, management targets revenue of $90 billion and earnings per share of $8.05. A dividend payment is scheduled for July. But the immediate question is whether the $638 billion backlog can generate sufficient free cash flow quickly enough to offset the mounting debt and dilution from the $20 billion equity raise.
Oracle's week is a case study in the AI infrastructure supercycle: the companies best positioned to win it must invest at levels that terrify traditional equity investors. The management view is that the spending is necessary; the market view, reflected in a 14% drop, is that the price of ambition may be too high. Which side proves correct will depend on how fast those massive customer commitments turn into actual cash.
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