Oracle (NYSE: ORCL) is one of the most important companies in the global artificial intelligence (AI) infrastructure ecosystem, as it is aggressively building data centers to enable customers to run AI workloads in the cloud. However, the stock’s performance has left much to be desired this year.
Oracle stock has shed 33% of its value in 2026, as of this writing, which seems surprising at first, given that it is quickly building a massive revenue pipeline that should ensure solid growth for years to come. However, the market has been worried about the tech giant’s increasing debt, which it is using to fund its data center build-out.
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Analysts, however, remain bullish about Oracle’s prospects, anticipating solid gains over the coming year. Let’s see if Oracle can indeed live up to Wall Street’s expectations and jump higher by the end of 2027.
Oracle’s growth will accelerate going into 2027
Oracle’s debt stood at $167.4 billion at the end of fiscal 2026 (which ended on May 31). The company’s debt increased by $43 billion last year. It plans to raise another $40 billion in fiscal 2027 through debt and equity financing. Oracle has already announced that it will raise $20 billion through equity financing this year, suggesting that the rest could come in the form of fresh debt.
Investors are concerned about Oracle’s ballooning debt, and the equity issuance is resulting in stock dilution. However, it is worth noting that Oracle’s funding moves will enable it to accelerate the recognition of revenue and earnings from its remaining performance obligations (RPO). RPO is the total value of contracts that a company has yet to fulfill.
Oracle’s RPO was a whopping $638 billion at the end of fiscal 2026. That’s almost 10x the company’s fiscal 2026 revenue of $67.4 billion. The money that Oracle is spending to build more data centers explains why it anticipates a 33% jump in revenue in fiscal 2027 to $90 billion, nearly double its growth last year.
Oracle management noted on the June earnings call that it expects to convert 12% of its RPO into revenue over the next year. Even better, Oracle sees 34% of its RPO turning into revenue between 13 and 36 months, suggesting its growth rate will continue to accelerate beyond fiscal 2027 (which ends in May next year).
