AI Cloud Spending Is Splitting Companies Into the Funded and the Stretched
AI infrastructure spending has been booming over the past couple of years, and the biggest question for tech sector investors isn’t how much revenue these companies you hear about have booked, but who bears the risk while they borrow billions.
Oracle (NYSE: ORCL) closed the first quarter of its fiscal 2027 with $664 billion in remaining performance obligations (RPO), a backlog bigger than its own market cap. It also had $1.4 billion in interest expenses that quarter as its total notes payable and other borrowings reached $125.3 billion.
A backlog larger than the whole company and a debt bill growing faster than revenue point to the real question behind every AI infrastructure stock: When a company signs a 15-year contract to build data centers for a hyperscaler, who’s fronting the cash to pour the concrete, and what happens if the contract pays out slower than planned?
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.