Oracle has decided to increase its capital expenditure projections for fiscal year 2026 by $15 billion more than initially expected, primarily to support AI capabilities. This decision follows a significant rise in its Remaining Performance Obligations (RPO)—the promise of future revenues based on services already ordered but not yet delivered. Highlighted during Oracle’s Q2 2026 earnings call, CFO Doug Kehring mentioned the swift potential to monetize the added RPO, justifying the augmented capital expenses. Nevertheless, investors are cautious, reacting to Oracle’s recent $68 billion increase in backlog last quarter, driven by deals with major players like Meta and Nvidia. These commitments mitigate Oracle’s heavy reliance on OpenAI, which itself faces a daunting $300 billion payment to Oracle over five years despite having not recorded a profit.

Oracle is simultaneously tackling a spike in restructuring costs, which hit $406 million—a remarkable 387 percent year-over-year rise due to layoffs linked to its $1.6 billion Restructuring Plan. Despite the turbulence, Oracle reported a revenue of $16.1 billion, marking a 14 percent annual increase, resulting in earnings per share rising 91 percent to $2.10. Detailed financial highlights included cloud revenue growing 34 percent to $8 billion and cloud infrastructure revenue soaring 68 percent to $4.1 billion.

However, these figures have left investors less than impressed, evidenced by an 11 percent drop in Oracle’s stock price after-hours. The stock had previously plunged 23 percent in November during uncertainty stemming from Oracle’s extensive borrowing—a necessity to bankroll its AI investments that inspired financial analysts, like Morgan Stanley, to suggest shorting its stock.

Oracle remains optimistic about mitigating financial strains, suggesting diversified funding options through public bonds, private markets, or innovative financing deals involving customer-provided or leased data center equipment. Despite current market skepticism, Oracle’s stock remains 20 percent higher for the year, aligning with NASDAQ’s performance.