Oracle’s Twin Tightropes: A $165 Billion Data Center Bet and a $553 Billion OpenAI Dependency

Oracle builds a massive fuel-cell-powered AI data center in New Mexico while over half its $553B backlog relies on OpenAI, leaving stock down 50% from highs.

Oracle is placing two enormous, interconnected bets that will define its future — and Wall Street is struggling to decide whether the company is a visionary or a risk too far. On one hand, the tech giant is constructing one of the world’s largest AI data center complexes in the New Mexico desert, a project so vast it will run entirely on fuel cells and cost up to $165 billion. On the other, more than half of its record $553 billion backlog of contracted revenue hinges on a single client: OpenAI, a startup that just admitted to missing its own growth targets.

The tension between these two narratives has left Oracle’s stock deeply wounded. In euro terms, the shares trade at around €140 — roughly 17% below where they started the year and more than 50% below the 52-week high of €280.70 touched in September 2025. The relative strength index has sunk to 26.5, a level that typically signals deeply oversold conditions.

A Desert Campus Without Combustion

On April 27, Oracle and its development partner BorderPlex Digital Assets revealed that the planned “Project Jupiter” campus in Doña Ana County will be powered exclusively by Bloom Energy fuel cells, with installed capacity reaching up to 2.45 gigawatts. The original design called for gas turbines and diesel generators. The switch to fuel cells, which generate electricity without combustion, cuts nitrogen oxide emissions by roughly 92% compared with the earlier plan. The entire facility will operate as a single microgrid.

The scale is staggering. The campus spans 1,400 acres and includes four data center buildings, battery storage systems, and a seawater desalination plant. Developers Stack Infrastructure and BorderPlex have penciled in investments of up to $165 billion, with Oracle already confirmed as the anchor tenant.

For the local economy, the promises are substantial: more than $600 million in tax revenue for the state and county, $320 million directly to Doña Ana County for schools and infrastructure, and $50 million for water supply. The construction phase is expected to create roughly 4,000 jobs, with 1,500 permanent positions to follow.

Not everyone is celebrating. The Empowerment Congress of Doña Ana County and two residents have sued the County Commission, alleging insufficient information and procedural errors in the approval of tax breaks.

The OpenAI Shadow

The market’s anxiety, however, has little to do with New Mexico politics. The trigger was a Wall Street Journal report that OpenAI, the ChatGPT developer, had missed internal revenue and user targets for 2025. Oracle rushed to defend its most important customer on social media platform X, but the damage was done. The stock slid on Tuesday and extended losses on Wednesday to €138.94.

The reason for the jitters is structural. Oracle’s remaining performance obligations — contracted but not yet recognized revenue — hit a record $553 billion. More than half of that sum comes from a single five-year deal with OpenAI. The startup is not yet profitable. If that anchor client stumbles or slows its pace, Oracle’s entire growth narrative wobbles.

The company is meanwhile spending aggressively to build out AI data centers, with capital expenditures for fiscal 2026 rising to around $50 billion — 43% more than analysts expected just three months ago, according to CNBC. Oracle has raised fresh capital through bonds and preferred stock to fund the buildout. These upfront investments represent a massive bet on a future that has yet to materialize, with the bulk of contracted revenue not expected to flow until 2027 at the earliest.

Analysts Split, Debt Mounts

Wall Street is divided. Wedbush’s Dan Ives reiterated his “Outperform” rating and $225 price target on April 24, arguing that the market is misreading Oracle’s investment cycle as speculative risk when the spending is backed by contracts. He also points to OpenAI’s sufficient capital cushion. Of 46 analysts covering the stock, 35 recommend buying.

Morgan Stanley is more cautious, cutting its price target to $207 and downgrading the shares to “Equal Weight,” citing uncertainty around margins in the graphics processor business.

The fundamental picture is mixed. Oracle beat expectations last quarter with adjusted earnings of $1.79 per share and issued a strong revenue forecast for the current quarter. But the balance sheet tells a different story: debt has climbed to nearly $125 billion, and free cash flow has turned negative as investment spending surges.

The next quarterly report will test whether management can keep costs under control — and whether Ives’ thesis that investors are simply mispricing the stock holds up. Until then, Oracle must walk a tightrope between a $165 billion desert bet and a $553 billion dependency on a single, unprofitable client.