JPMorgan Report: Oracle's Backlog Grows by $26 Billion, Funding Path Remains Uncertain

Oracle's remaining performance obligations (RPO) reached $664 billion in F1Q27, up $26 billion sequentially and 46% year-over-year. While IaaS revenue surged 121%, JPMorgan analysts noted that market debate persists regarding Oracle's funding strategy. New AI contracts exceeding $30 billion are structured via prepayments or bring-your-own-hardware (BYOH) models, reducing immediate cash needs. However, investors remain concerned about capital expenditure peaks beyond FY28 and the lack of a clear timeline for positive free cash flow. JPMorgan maintains an overweight rating with a $200 price target, citing potential upside from profit growth and valuation re-rating, despite risks related to customer concentration and capital costs.