Oracle sudden share rise now have explanation (new case for investment history)

We informed you several days ago about the sudden skyrocketed rise of Oracle’s shares in one day: Oracle’s massive upside surprise was the focal point of the day’s trade. The company’s remaining performance obligations surged to $455 billion, up an astonishing 359% year-over-year, signaling a wave of locked-in cloud contracts from major AI players.

This appeared to be a miracle—it’s difficult to conceive of such a substantial 359% increase in potential revenue. However, we now understand that this surge was attributable to a single order from OpenAI. Let me quote a Barrons article:

“There are also questions about the quality of the backlog. On Wednesday, TheWall Street Journal reported that nearly all of Oracle’s backlog growth came from one customer, OpenAI, which signed a five-year $300 billion
contract with Oracle that’s set to begin in 2027. Investors should ask themselves where that $300 billion is coming from.

OpenAI is still burning through cash and relies on investors to fund its rapid growth. The company’s largest funding round to date was a $40 billion infusion, half of which is conditioned on OpenAI converting from a
nonprofit to a public-benefit corporation by the end of the year. That switch is still waiting on approval from regulators in California and Delaware.

Even assuming OpenAI gets the entire $40 billion, it will have to raise a lot more money to meet its $300 billion
commitment”.