Oracle’s Record Backlog Lures Institutional Buyers as Cash Flow Dives to Negative $23.7 Billion
Published on 06/19/2026 at 03:24 | Redaktion boerse-global.de
While Oracle’s stock has shed 43 percent from its September peak and sits at around €160 — roughly 4 percent in the red since the start of the year — a cadre of deep-pocketed institutions has been quietly loading up. Norway’s central bank, Norges Bank, built a new position worth $4.34 billion. BBVA boosted its stake by 6.8 percent, and Altshuler Shaham raised its holding by a chunky 23.8 percent. The message from the smart money: the short-term cash crunch is a distraction from a once-in-a-generation revenue wave.
That wave is visible in the numbers. Oracle ended its fourth fiscal quarter with a remaining performance obligation of $638 billion — a 363 percent surge year on year. The headline item within that backlog is a reported $300 billion contract with OpenAI. Quarterly revenue climbed 20.6 percent to $19.18 billion, with Oracle Cloud Infrastructure posting segment growth as high as 93 percent. GPU utilisation sits at a near-capacity 97.5 percent, underscoring just how much demand is straining the company’s existing infrastructure.
The rub, of course, is the price of building that infrastructure. Fiscal 2026 investment spending hit nearly $56 billion, and the free cash flow cratered to negative $23.7 billion. For fiscal 2027, management has guided capital expenditure between $90 billion and $95 billion — almost exactly matching the $90 billion revenue target for the same period. To bridge the gap, Oracle borrowed $43 billion in 2026 and plans to raise another $40 billion through debt and equity in 2027. Rivals Amazon and Microsoft finance their AI build-out from operating cash flow; Oracle is burning cash and diluting shareholders.
Should investors sell immediately? Or is it worth buying Oracle?
Management has a defence. A large chunk of the backlog consists of AI contracts where customers either prepay for the graphics processors or supply the hardware themselves. Those customer investments have already totalled $75 billion, lowering Oracle’s own funding needs. For 2027, the company reaffirmed its revenue goal of $90 billion and guided adjusted earnings per share to $8.05 — an 18 percent increase. The average analyst price target stands at €220.52, implying the market may have overreacted. Oracle also swiftly denied a media report that a leasing deal with Microsoft worth over $3 billion had fallen apart over security concerns, insisting Microsoft remains a close partner.
The stock’s 70 percent price range over the past year reflects an unresolved tension: a record order book versus a yawning cash deficit. The recent institutional buying suggests some large investors are betting the AI demand surge will eventually flip the cash flow positive — but the burden of proof rests squarely on management’s shoulders. For now, Oracle pays a quarterly dividend of $0.50 per share, a yield of about 1.1 percent — a thin cushion for income seekers, but a reminder that the real prize lies in the infrastructure contracts that will stretch well into the next decade.
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