Oracle Corp.'s (NYSE:ORCL) stock slid over 8% in premarket trading Thursday as investors panicked over a plan to raise $40 billion to fund AI infrastructure, but CNBC’s Jim Cramer is defending the software giant, arguing the financing isn’t "outrageous" given the company’s $638 billion backlog.
Backlog Vs. Funding Fears
The sharp selloff—following a 10% tumble in after-hours trading—highlights a growing rift on Wall Street regarding the massive cash burn required to scale artificial intelligence clusters.
While the tech giant reported a blockbuster remaining performance obligation (RPO) of $638 billion, a figure highlighted by Futurum Equities’ Shay Boloor as “absolutely wild,” the simultaneous $40 billion debt and equity financing announcement spooked the market.
Cramer pushed back against the bearish sentiment on social media, emphasizing that high-performance AI data centers are incredibly capital-intensive by nature.
The ‘Polarizing Name’ In AI Tech
Boloor noted that Oracle has quickly transitioned into a “polarizing name” because the debate has shifted from the size of its backlog to how much capital it must spend, how much equity it needs to issue, and whether the revenue carries strong enough margins to justify the buildouts.
However, he noted that bears are overlooking a crucial hidden detail. Customers are already prepaying or funding roughly $75 billion of the buildout through prepaid contracts or customer-supplied GPUs.
This “underappreciated offset” means Oracle is not carrying the massive financial burden entirely on its own balance sheet.
New CFO Hilary Maxson confirmed that these unique structures provide a lower cash CapEx requirement up front, paving the way for a highly profitable steady-state return on invested capital in the high 20s.
How Has ORCL Performed In 2026?
Shares of ORCL have risen by just 3.26% year-to-date. It closed 2.21% lower at $201.26 apiece on Wednesday, and it was 8.12% lower in premarket on Thursday.
Over the last month, ORCL stock was up 2.17%, and it fell 9.75% over the last six months; the stock 13.40% higher over the year. Benzinga’s Edge Stock Rankings indicate that ORCL maintains a strong price trend in the medium and short terms but a weak trend in the long term, with a poor value score.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
Login to comment