Why I Can’t Stop Buying This $553 Billion AI Infrastructure Gatekeeper

The post Why I Can’t Stop Buying This $553 Billion AI Infrastructure Gatekeeper appeared first on 24/7 Wall St..

Oracle has been my focus this month, and the recent selloff has only sharpened that focus. The stock has dropped 29.45% since June 1, the financial press is hyperventilating about cash burn, and my cost basis keeps falling while my conviction keeps rising. That combination is rare. I am going to use it.

Here is what keeps pulling me back to Oracle (NYSE:ORCL). The company sits at the toll booth of enterprise AI infrastructure, and the toll receipts already in hand are staggering. Remaining performance obligations closed Q4 FY2026 at $638 billion, up 363% year over year. That is contracted, signed, future revenue. Of that backlog, $75 billion is tied to prepaid or customer-supplied GPU arrangements, meaning customers are footing part of the capital bill. Co-CEO Clay Magouyrk put the footprint plainly: “Oracle has over 211 live and planned regions worldwide, more than any of our cloud competitors.” When you own the rails, you collect the fare regardless of which model wins.

The data carrying my conviction

Three numbers do the heavy lifting. First, Cloud Infrastructure revenue grew 84% in Q3 and accelerated to 93% in Q4, hitting $5.787 billion. The Multicloud AI Database business grew 404% in the quarter. Acceleration at this scale is what I am paying for.

Second, operating cash flow for the full year reached $31.977 billion, up 53%. Net income climbed to $17.087 billion, up 37%. Operating margin sits at 36.3%, return on equity at 53.4%. The business is growing more profitable while it builds the most expensive thing it has ever built.

Third, management raised the FY2027 plan. Revenue is now guided to $90 billion with non-GAAP EPS of $8.05. Against a current price of $175.07, that puts forward earnings at roughly 23 times next year. For a company growing cloud at a 58% to 64% clip into Q1, that multiple looks compressed against the growth rate. The quarterly dividend of $0.50, payable July 24, 2026, is a small bonus while I wait.

The risk I will not pretend away

Free cash flow ran to negative $23.686 billion for FY2026 against $55.663 billion in capital expenditures. Total liabilities stand at $218.7 billion, and Oracle plans to raise roughly $40 billion more in FY2027 through debt and equity. If AI demand cools or GPU sourcing seizes up, that capex bill becomes a millstone. I respect the risk.

What keeps me buying anyway is the structure of the spend. Customers prepaid a chunk of it. The $30 billion bond raise earlier this year was substantially oversubscribed. Operating cash flow is growing faster than net income. This is a company building to fill orders already on the books.

Why my buy button stays active

The June panic priced Oracle as if the AI buildout were a leap of faith. The $638 billion backlog says it is a delivery schedule. I am buying the delivery schedule at a discount, collecting the dividend on the way, and letting Magouyrk and Mike Sicilia finish the datacenters that customers have already paid to use. When the market recognizes that infrastructure built to fulfill signed contracts represents committed delivery revenue, the rerating could be significant.

The post Why I Can’t Stop Buying This $553 Billion AI Infrastructure Gatekeeper appeared first on 24/7 Wall St..