Could Oracle Stock Give Back Its Gains?

Core Insights - Oracle's recent earnings report revealed a significant backlog tied to multi-year AI and cloud contracts, raising questions about the speed of revenue conversion [1][4] - The company's remaining performance obligations (RPO) and plans for scaling cloud infrastructure suggest improved revenue visibility over the long term [2] Financial Performance - In Q1 of fiscal 2026, Oracle reported total revenue of $14.9 billion, a 12% increase year-over-year, with cloud infrastructure revenue soaring 55% to $3.3 billion [4] - Non-GAAP earnings per share rose 6% year-over-year to $1.47 [4] Backlog and Revenue Recognition - Oracle's RPO surged 359% to $455 billion, attributed to four multi-billion-dollar customer contracts [4] - Expected revenue recognition from RPO is approximately 10% within the next 12 months, 25% in months 13 to 36, 34% in months 37 to 60, and the remainder after five years, indicating a back-weighted revenue profile [5] Market Sentiment - CEO Safra Catz described the quarterly results as "astonishing," highlighting the growing demand for Oracle Cloud Infrastructure (OCI) [5] - Despite the positive long-term outlook, some investors express concerns regarding the timing of backlog conversion and the execution of Oracle's ambitious capacity expansion plans [6][7]