Investor Buys Oracle After 60% Slide, Betting $638 Billion Backlog Will Convert

3 articles · Updated · The Motley Fool · Jul 19

Oracle shares down more than 60% from their 52-week high prompted the investor to open a new position, arguing the selloff may overstate execution and financing risks.
$638 billion in remaining performance obligations underpins the bullish case, with Oracle saying that signed backlog rose 363% from a year earlier as AI infrastructure demand surged.
OpenAI accounts for about half that backlog, sharpening concern after its IPO delay and raising doubts about whether Oracle's largest customer can fund all of its commitments.
$43 billion in new debt last fiscal year and plans to raise another $40 billion through debt and equity explain much of the market's caution as Oracle spends heavily to build capacity.
Less than 16 times forward earnings, 1.6% dividend yield and roughly 27% net margin make the stock look cheap if backlog converts to revenue before the spending plan becomes unmanageable.