Oracle Doubles Down on AI Data Centers as Backlog and Debt Raise Conversion Questions

A $553 billion remaining performance obligations figure and a roughly $50 billion capex plan force investors to balance clear customer demand with higher leverage and execution risk.

Overview

Oracle reported remaining performance obligations of $553 billion, a 325% year‑over‑year increase that reflects large AI infrastructure contracts the company has booked.
The company posted solid near‑term results with Q3 fiscal 2026 revenue of $17.2 billion and non‑GAAP EPS of $1.79, and it raised fiscal 2027 revenue guidance to about $90 billion.
Management plans to sharply increase capital spending to roughly $50 billion in the current fiscal year and has arranged project financings and modular data‑center supply deals to support new builds.
Some influential analysts have upgraded their views and raised price targets, citing visible demand from customers such as OpenAI, Meta, Nvidia and Microsoft, while other market participants warn that customer concentration and funding risk could slow backlog conversion.
Shares trade well below last year’s peak and at mid‑30s current P/E with a forward multiple near 24, leaving investors to weigh attractive valuation against the timing and certainty of turning booked contracts into cash flow.