Oracle Corporation (ORCL) is investing tens of billions in artificial intelligence (AI) infrastructure, primarily through debt and equity, amid investor concerns about free cash flow. Despite these worries, Oracle’s Remaining Performance Obligations reached $638 billion in Q4 of fiscal 2026, a 363% year-over-year increase, bolstered by major AI contracts. Cloud infrastructure revenues rose 93% to $5.8 billion, with its AI Database growing 404%, marking it as the fastest-growing segment in the company.
In fiscal Q1 2027, Oracle expects total revenue growth of 27% to 29% and cloud revenue growth of 58% to 64%, with non-GAAP earnings per share between $1.72 and $1.76. The full fiscal year revenue target remains at $90 billion, and the company has increased its EPS guidance to $8.05, indicating an 18% growth. Oracle plans $40 billion in debt and equity financing for 2027 without expecting further debt issuance in 2026.
Oracle faces competition from Microsoft, Amazon, and Alphabet in the cloud and AI spaces. Despite its higher valuation with a price-to-earnings ratio of 23.02x, Oracle’s substantial RPO growth offers potential opportunities for investors willing to endure near-term balance-sheet risks as the company expands its AI partnerships and data center capabilities.
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