Oracle's $664 Billion Backlog and a Founder Who Won't Sell: Inside the AI Trade's Toughest Test

Oracle's $664B backlog and AI cloud growth clash with rising restructuring costs, now about $2.8B in fiscal 2026, plus an EU licensing review.

Oracle finds itself caught between two competing narratives, and the market can't decide which one to believe. On one side sits a staggering backlog of committed business. On the other, a restructuring bill that keeps getting bigger.

The company's most recent quarterly results beat Wall Street estimates, accompanied by more than $30 billion in new AI cloud contracts, according to Reuters. Remaining performance obligations — the backlog of contracted work not yet delivered — climbed to $664 billion. That figure represents a massive revenue cushion stretching years into the future.

But in a regulatory filing, Oracle disclosed that restructuring costs tied to its ongoing layoffs will rise by roughly $700 million. The total tab for the program in fiscal 2026 is now expected to reach approximately $2.8 billion. It marks the second time those cost estimates have been revised upward, raising uncomfortable questions about whether the program remains under control.

A Stock Caught Between Two Stories

Shares trade at EUR 132.10, sitting 7.7% above their 50-day moving average — a signal that the near-term trend remains intact despite the fresh cost disclosure. The stock also stands roughly 53% below its 52-week high of EUR 279.35, reached last September, while holding more than 31% above its annual low of EUR 100.76.

That wide range tells the real story. Oracle has become a litmus test for whether investors are willing to stomach aggressive borrowing in exchange for AI infrastructure growth.

The growth engine itself shows no signs of slowing. Cloud infrastructure is expanding at triple-digit rates, and the order book swelled by more than $200 billion over the past year alone. Yet that same momentum generates the anxiety that makes every corporate gesture matter. Growth of this magnitude devours capital at a pace that traditional valuation models struggle to capture.

Ellison's Signal

Larry Ellison, Executive Chair and Chief Technology Officer, canceled his 10b5-1 trading plan outright on Saturday. No shares were sold under it, and the company says no further selling intentions exist. For a conglomerate whose stock has shed nearly half its value over twelve months, the move carries weight beyond a routine disclosure.

The message reads as a bet: those who stand to gain most from their own forward guidance don't sell when they believe in it.

Meanwhile, CEO Michael D. Sicilia sold shares during the week under an automatic trading plan established last December — a routine transaction that barely registers next to Ellison's conspicuous restraint.

The Capital Hunger

To understand why sentiment remains split, the numbers need to be laid side by side. Oracle has pegged its investment plan for the current fiscal year at approximately $70 billion and intends to raise another $40 billion in fresh debt and equity to fund it. This is no peripheral financing — it's a structural wager on the future of AI demand.

Internally, the cost-cutting has been equally aggressive. Before mid-month, managers were instructed to reduce personnel costs, with some teams facing double-digit percentage cuts. Growth on one front, slimming down on another — a pattern typical of companies radically reordering their investment priorities. Building data centers and buying graphics processors means finding savings elsewhere.

Guidance for the coming fiscal year calls for at least $90 billion in revenue and adjusted earnings per share of $8.10 — ambitious targets achievable only if cloud demand continues unabated.

Wall Street's Split Verdict

Analyst reactions bent in one direction: price targets down, skepticism about capital intensity up. BMO Capital Markets lowered its target from $220 to $195 while keeping an "Outperform" rating. Scotiabank had already cut its target from $241 to $215, also maintaining a positive rating. Russia's Freedom Broker likewise held onto its buy recommendation. The pattern is unmistakable — nobody questions the growth, but everyone is recalculating the cost of capital.

Regulatory Clouds Gather

Adding to the pressure, EU competition authorities are examining Oracle's licensing practices. The probe, according to Reuters, is still in its early stages and its outcome remains open. Should it escalate into a formal investigation, additional legal risks and costs could follow.

The critical question for investors is straightforward: will cloud and AI contract volume grow fast enough to outpace the drag that restructuring costs place on margins? A swelling backlog doesn't automatically protect near-term profitability when billions are simultaneously flowing out the door for severance and reorganization. What matters is not the backlog itself, but the speed at which it converts into actual cash flow — while the cost side is already locked in.

If Oracle can credibly demonstrate that the $664 billion in commitments is translating into revenue and cash flow, the stock should extend its recent recovery and distance itself further from its 52-week low. Should that perception crack — through further upward revisions to restructuring costs or an escalation of the EU licensing case — a retreat toward those lows becomes a real possibility.

The next concrete test for shareholders is twofold: how the EU antitrust process develops, and whether the restructuring program is truly complete at the now-projected $2.8 billion, or whether it needs yet another adjustment. Until then, the stock remains a balancing act between an AI-driven growth promise and the price of its own transformation.