This article first appeared on GuruFocus .
Oracle ( NYSE:ORCL ), the database and cloud-infrastructure powerhouse, climbed approximately 2.3% to $157.62 Friday after locking in September 10 for its fiscal first-quarter earnings report. Wall Street now wants proof that Oracle's monster artificial-intelligence backlog can become monster revenue.
The demand is already there. Remaining performance obligations hit $638 billion in Mayroughly 9.5 times Oracle's $67.4 billion in fiscal 2026 revenue. Fourth-quarter cloud revenue rocketed 47% to $9.9 billion, while infrastructure sales exploded 93%. Management expects first-quarter revenue to jump 27%29%. Oracle does not have a demand problem. It has a delivery test.
That test will be expensive. Oracle generated $32 billion in annual operating cash flow but burned through $23.7 billion of free cash flow while racing to build AI data centers. Customers have prepaid or supplied $75 billion of hardware, yet the company still expects to raise roughly $40 billion during fiscal 2027. The valuation picture looks tempting: Oracle trades 18.81% below its $194.13 GF Value. But that discount only becomes an opportunity if Oracle converts its colossal backlog faster than the cash pile disappears.
