NEW YORK, July 8, 2026, 10:06 EDT
- Oracle NYSE:ORCL slipped 0.9% to $140.39, putting its market cap near $408.8 billion.
- Oracle’s RPO stands at $638 billion, roughly 9.5 times its projected FY2026 sales. Just 12% of that is set to turn into revenue over the next year.
- Microsoft NASDAQ:MSFT reports a comparable backlog, but its market cap is nearly seven times that of Oracle, and a larger chunk of its RPO is set to convert inside one year.
Oracle NYSE:ORCL shares slipped in New York Wednesday morning. Investors keep discounting the difference between Oracle’s big AI deal backlog and the cash it needs for new data centers. Shares traded at $140.39, off a 52-week high of $345.72 mentioned in a Motley Fool piece on Yahoo Finance Tuesday. The stock lost 25% in the first half of 2026.
Timing is the main point this time. Oracle wrapped up fiscal 2026 with $638 billion in remaining performance obligations, which is a 363% jump from a year ago, after it landed several big cloud deals. The annual report says only 12% of that becomes revenue in the next 12 months, 34% comes in months 13 to 36, another 34% in months 37 to 60, and the rest hits after five years. So roughly $127.6 billion in signed revenue is scheduled past month 60.
| Backlog test | Oracle NYSE:ORCL | Microsoft NASDAQ:MSFT |
|---|---|---|
| Contracted revenue | $638 bln RPO | $627 bln commercial RPO |
| Set to become revenue in the coming year | 12%, about $76.6 bln | about 25%, about $156.8 bln |
| Market cap | $408.8 bln | $2.86 trln |
| Market cap per $1 RPO | $0.64 | $4.56 |
The numbers don’t line up exactly since Oracle gives total RPO and Microsoft reports commercial RPO. But the comparison gives a look at how the market values backlog. Oracle’s RPO is a bit bigger, but Microsoft converts twice as much in the next 12 months and still had $15.8 billion in free cash flow last quarter after $31.9 billion in capital spending.
Oracle holders are watching the cash. Oracle reported $32.0 billion in operating cash flow for FY2026, but free cash flow was negative $23.7 billion due to big cloud spending. The company took on $43 billion in debt and raised another $5 billion in equity through FY2026. It forecasts about $40 billion in debt and equity funding for FY2027.
| Oracle funding and commitments | Amount |
|---|---|
| Operating cash flow, FY2026 | $32.0 bln |
| Free cash flow, FY2026 | $(23.7) bln |
| Capital expenditures, FY2026 | $55.7 bln |
| Debt raised, FY2026 | $43.0 bln |
| Equity raised, FY2026 | $5.0 bln |
| Planned debt/equity funding for FY2027 | about $40.0 bln |
| Data-center lease commitments, additional | $260.0 bln |
| Power obligations and later cloud-infrastructure commitments | $32.3 bln |
Investors haven’t focused much on the lease line. Oracle’s annual report shows $260 billion of extra lease commitments, tied mainly to data-center deals set to begin in the first quarter of fiscal 2027 and running through fiscal 2029 for 15 to 19 years. These commitments were not on the balance sheet as of May 31. Oracle also reported $13.3 billion in purchase and other obligations, mostly for data-center power, and $19 billion in cloud-infrastructure buy commitments for later years.
Data-center leases and purchases come to about $292.3 billion—around 72% of Oracle’s market cap and 46% of the $638 billion RPO, according to company filings and prices from Wednesday. The build costs hit early, but most of the revenue won’t show up for years.
Recent takes are mixed. Trefis pointed to the $638 billion RPO as “the one number” behind any Oracle upside and said it’s nearly ten times Oracle’s current business. On Tuesday, Seeking Alpha’s Andres Veurink had a Strong Buy on the stock, saying the market isn’t giving enough credit to Oracle’s revenue visibility or its cloud growth. The Motley Fool pushed back, highlighting Oracle’s own warning about possible “non-payment and non-performance” from a few large OCI customers in the annual report. Trefis
Oracle says it’s counting on customer funding and scale for growth. CEO Clay Magouyrk said on June 12, “AI Infrastructure makes the existing cloud infrastructure market look small,” after signing $67 billion worth of AI infrastructure contracts for the quarter. Magouyrk added that bring-your-own-hardware and prepaid customer contracts grew to $75 billion. Oracle Blogs
Magouyrk pushed back on single-customer risk. “There will be many winners in AI, and our strategy is to have them all as customers,” he said. He noted that four customers signed contracts topping $8 billion each in the quarter, and Oracle’s global GPU utilization rate hit 97.5%. Oracle Blogs
Piper Sandler’s Billy Fitzsimmons this week maintained a Buy on Oracle with a $225 price target, TipRanks reported. Piper is projecting Oracle could add 2,400 megawatts of new capacity for fiscal 2027, which may bring in around $23 billion in net new OCI revenue and about $2.2 billion in upside to current estimates.
OpenAI is still a risk. Reuters said in September 2025 that OpenAI signed a $300 billion deal with Oracle for computing power across five years, citing the Wall Street Journal. Bernstein’s Mark Moerdler later told Reuters this gives Oracle “unprecedented single customer revenue exposure.” Reuters
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