The stock trades near $143<\/strong>, down about 27% in 2026<\/strong> and off more than 50%<\/strong> from its 52-week high near $346<\/strong>.<\/p>\n That kind of drop usually follows a bad quarter, but Oracle\u2019s was the opposite of bad.<\/p>\n So the question for anyone holding the stock, or thinking about buying the dip, is simple. Why is Wall Street walking away from a company that keeps setting records?<\/p>\n Oracle closed fiscal 2026 with remaining performance obligations, or RPO<\/strong>, of $638 billion<\/strong>.\u00a0<\/p>\n RPO is simply contracted work that the company has signed but not yet delivered. It is a preview of future revenue.<\/p>\n That figure jumped 363%<\/strong> from a year earlier and rose by $85 billion<\/strong> in the fourth quarter<\/strong> alone, according to Oracle’s official earnings release.<\/p>\n For context, that backlog is worth roughly 1.5 times Oracle’s entire market value<\/strong>, an unusual sign that demand is running ahead of what the stock price reflects.<\/p>\n Most of that growth traces back to one pivot. Oracle stopped being only a database and software vendor and started renting out AI infrastructure<\/strong>.<\/p>\n The company is positioning itself as a landlord for the data centers that train and run large AI models.<\/p>\n d3sign / Getty Images<\/p>\n<\/figcaption><\/figure>\n Building all that AI capacity costs real money up front, long before the contracts pay off.<\/p>\n Oracle spent about $56 billion<\/strong> on capital expenditures<\/strong> in fiscal 2026, up 162%<\/strong> from the prior year.\u00a0<\/p>\n That resulted in a free cash flow<\/strong>deficit of $23.7 billion<\/strong>, even as operating cash flow<\/strong>climbed 54% to $32 billion<\/strong>, Reuters reported.<\/p>\n More AI Stocks<\/strong>:<\/p>\n In plain terms, Oracle is spending faster than its business generates cash, and it is funding the gap with debt and new stock.<\/p>\n The company plans to raise about $40 billion<\/strong> through debt and equity<\/strong> in fiscal 2027, including a $20 billion equity program<\/strong> that could dilute existing shareholders by roughly 5%<\/strong>, CNBC reported.<\/p>\n There is one more issue that unsettled investors.\u00a0<\/p>\n According to an SEC filing, Oracle added a warning that its AI buildout could pressure profitability and that its AI products might not perform as expected.<\/p>\n Oracle signed a multiyear deal<\/strong> worth roughly $300 billion<\/strong> to supply data center capacity to OpenAI, Fortune reported.\u00a0<\/p>\n Analysts estimate more than half of the $638 billion backlog<\/strong> may be tied to that relationship.<\/p>\n Related: Oracle stock falls for a seventh session as filing risk lands<\/strong><\/p>\n That concentration goes both ways. If OpenAI’s computing needs keep growing, Oracle wins big.\u00a0<\/p>\n If OpenAI’s demand or funding tightens, Oracle absorbs the loss through leases and debt already on its books.<\/p>\n This is the core risk investors are considering right now, and it explains why strong numbers have not been enough to steady the stock.<\/p>\n Oracle’s slide looks worse next to peers that are riding the same AI wave.<\/p>\n The message from that gap is clear. The market is not doubting AI demand broadly. It is singling out Oracle’s balance sheet and its heavy reliance on one anchor customer.<\/p>\n Oracle has to hit roughly $90 billion<\/strong> in revenue for fiscal 2027, a 34% jump<\/strong>, for its cloud contracts to turn into recognized sales.\u00a0<\/p>\n Also, it has to sustain the momentum behind its cloud infrastructure revenue, which already grew 84% in the third quarter<\/strong>, far outpacing its larger rivals.<\/p>\n Wall Street still remains positive about the stock. As of early July, 28 of 32 analysts rated ORCL a Buy<\/strong>, with an average 12-month target at $263.86<\/strong>.<\/p>\n Oracle’s problem is not demand. It is timing.<\/p>\n The company currently has the highest volume of contracted work in its history, but it has to spend tens of billions today to earn that revenue later.\u00a0\u00a0<\/p>\n Oracle is funding this gap with borrowed money and new shares.<\/p>\n For long-term investors, that trade-off can work if the backlog converts and margins hold.\u00a0<\/p>\n For short-term investors, the cash burn and OpenAI concentration are real risks that could keep the stock volatile.<\/p>\n The next real test comes at Oracle’s coming earnings report, when investors get updated on how fast that $638 billion backlog is turning into actual revenue. Until then, everything is still a debate.<\/p>\n Related: Bank of America aggressively revamps Oracle stock price target<\/strong><\/p>\n #Oracle039s #billion #promise #big #catch<\/p>\n","protected":false},"excerpt":{"rendered":" Oracle (ORCL) just booked the strongest sales year in its history, yet investors sold it anyway. The stock trades near $143, down about 27% in 2026 and off more than… <\/p>\n","protected":false},"author":1,"featured_media":11200,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[237,1056,651,8677,2308],"class_list":["post-11199","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-big","tag-billion","tag-catch","tag-oracle039s","tag-promise"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11199","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11199"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11199\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/11200"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}What the $638 billion Oracle backlog actually tells investors<\/h2>\n
![](\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMTA0NDU0\/photo-3104454.jpg?profile=rss\")
Why Oracle’s cash burn is scaring the market more than the growth excites it<\/h2>\n
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How much of Oracle’s growth story rides on OpenAI<\/h2>\n
How Oracle stock stacks up against the AI trade in 2026<\/h2>\n
2026 performance snapshot<\/h3>\n
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What still has to go right before Oracle stock recovers<\/h2>\n
Four things bulls need to see<\/h3>\n
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What Oracle’s selloff means for investors right now<\/h2>\n