Why Oracle’s Low-Cost Cloud Changes Everything

Alex Sirois

Tue, September 8, 2026 at 3:47 PM GMT+3 5 min read

Quick Read

Oracle Cloud Infrastructure revenue surged 93% to $5.8 billion in Q4, with GPU utilization at 97.5% and $638 billion in contracted backlog.
Oracle embeds inside Amazon, Google, and Microsoft clouds via 72 Multicloud datacenters, with Multicloud revenue up 404% year-over-year in Q4.
Despite heavy liabilities, operating cash flow grew 54% to $32 billion in FY2026, with most capital already pre-sold through contracted obligations.
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I keep hitting the buy button on Oracle (NYSE:ORCL) and I am not planning to stop. The stock is down 27.98% over the last year and 17.74% year to date, and every leg lower has looked like a gift to me rather than a warning. The reason is simple. Oracle has quietly become the cheapest, most flexible place to run AI workloads at scale, and the contracted demand behind that claim is now large enough that I want to own more of it.

Andriy Onufriyenko / Moment via Getty Images

What Keeps Me Buying

CEO Clay McGurk described Oracle Cloud Infrastructure as "the most highly secure, highest performing, most flexible, lowest-cost infrastructure available anywhere." I would normally roll my eyes at that language. The numbers make me take it seriously. Cloud Infrastructure revenue grew 93% in Q4 FY2026 to $5.787 billion. Global GPU utilization sits at 97.5%. When a hyperscaler runs its GPUs that hot, capacity is pulling customers in alongside price.

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Then there is the backlog. Remaining Performance Obligations reached $638 billion in Q4, up 363% year over year, with $75 billion tied to prepaid or customer-supplied GPU arrangements. Customers are handing Oracle cash and, in some cases, their own silicon. That flips the capital story: Hilary Maxson said the structures "enable us to have a lower cash CapEx requirement when we look at how we plan our business" and that "the return on capital is going to be a bit better as well." Management guides infrastructure return on invested capital in the high 20s at steady state.

The third leg is the outlook Oracle is willing to underwrite. FY2027 revenue is guided to $90 billion with non-GAAP EPS of $8.05, and Safra Catz has already staked OCI growth from $18B to $32B, $73B, $114B, $144B across the next four fiscal years, most of it already booked in RPO.

Why Oracle Over the Obvious Names

The reflex pick in cloud is Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), or Alphabet (NASDAQ:GOOGL). Oracle keeps winning my dollar because it is embedding inside those three rather than fighting them head-on. Oracle is more than halfway through building 72 Multicloud datacenters that live inside Amazon, Google, and Microsoft clouds, and the Multicloud database business grew 817% in Q2 FY26, 1,529% in Q1 FY26, and 531% in Q3 FY26. Multicloud revenue was up 404% year-over-year in Q4 with bookings up 325%. Every dollar an enterprise spends inside AWS, Azure, or Google Cloud on an Oracle database is a dollar those three cannot fully capture. That structural position is what a Microsoft or Amazon shareholder does not get.

Risks I Own With Both Eyes Open

Free cash flow was negative $23.686 billion in FY2026 on $55.663 billion of capex. Total liabilities sit at $218.7 billion, and Oracle plans to raise about $40 billion in FY2027 through debt and equity, including a $20 billion at-the-market equity program. That is real dilution and real leverage. My answer is the RPO schedule and the prepaid contract mix. Operating cash flow of $31.977 billion grew 54% for the full year, and 12% of RPO converts to revenue within 12 months. The capital being spent is already sold.

Why the Buy Button Stays Active

I collect a $0.50 quarterly dividend while the busiest AI backlog on any US-listed cloud grinds through the income statement. As long as GPU utilization stays near 97.5% and Multicloud keeps compounding inside the competition, my order stays in. All of that GPU demand still has to be powered, cooled, and networked by somebody, and we pulled together seven suppliers riding that same buildout in a free AI infrastructure report.

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