The AI Stock With a Monster Revenue Backlog Heading Into 2026

Core Insights - Oracle's backlog increased by $68 billion in Q2 of fiscal 2026, resulting in a total remaining performance obligations (RPO) of $523 billion, positioning the company for significant revenue growth in the AI sector [1][2] - The company's revenue grew 14% year over year, reaching $16 billion in the same quarter, with a notable 438% increase in backlog attributed to new commitments from major clients like Meta and Nvidia [3][5] Financial Metrics - Current market capitalization of Oracle is $509 billion, with a stock price of $177.16, and a gross margin of 65.40% [2] - The stock has experienced a 5% decline over the past year, but has gained 200% over the last five years, outperforming the S&P 500's 80% gain [5] Competitive Landscape - Oracle faces competition from major players such as Amazon Web Services, Microsoft Azure, and Google Cloud, which adds pressure to convert its backlog into revenue [7] - The company's forward price-to-earnings (P/E) ratio has decreased from the low 30s to approximately 26, indicating a potential buying opportunity for investors [8] Operational Considerations - The substantial backlog represents multiple years of revenue, but fulfilling these orders will require significant capital investment in data centers and infrastructure, raising concerns among investors [6]