Oracle cloud backlog reaches $664 billion amid AI demand

Oracle has reported a cloud backlog, or remaining performance obligations (RPO), of $664 billion as of its fiscal first quarter of 2027. This represents a $209 billion increase compared to the previous year. The company expects approximately half of this backlog to convert into revenue within the next 36 months.

Cloud infrastructure revenue grew 121% year-over-year to $7.4 billion in the first quarter. High demand for artificial intelligence (AI) workloads is driving this growth, with GPU utilization reaching 97.9%. To support this expansion, Oracle is investing heavily in AI infrastructure, utilizing customer prepayments, supplier financing, and planned debt raises.

Despite the strong backlog, analysts note several risks. These include potential delays in bringing new cloud capacity online, rising funding costs, and the pressure of high near-term spending. There are also concerns regarding whether infrastructure construction can keep pace with the arrival of enterprise workloads to ensure profitable utilization.