Oracle Pushes Hard Into AI Cloud While Financing Needs Balloon

Overview

• Oracle reported a strong quarter with revenue up 30% to $19.3 billion and total cloud revenue rising 62%, and it now expects at least $90 billion in revenue for fiscal 2027.
• Management said the company added more than $30 billion of new AI cloud contracts in the quarter, lifting its remaining performance obligations (RPO) to $664 billion and estimating roughly half will convert to revenue over the next 36 months.
• The company is rapidly building capacity—reporting about 850 megawatts of new data‑center capacity and over 300,000 GPUs—while first‑quarter free cash flow was negative $5.4 billion after roughly $28.5 billion of capital spending.
• To fund the buildout Oracle has raised its restructuring charge by about $700 million to roughly $2.8 billion, completed a $20 billion at‑the‑market equity offering, and said it plans to raise roughly $40 billion in debt plus equity this fiscal year.
• Analysts are split: some point to strong booked demand and customer prepayments that cut Oracle’s near‑term capex burden, while many investors worry about the timing of backlog conversion, higher financing costs, and pressure on margins as the company scales capacity.