Oracle's AI Bet: How a $550 Billion Backlog Is Fueling Its Data Center Push

Key Points

Oracle shares are rising Tuesday, rebounding from Monday's geopolitical-driven dip, with premarket gains of 0.87% to $179.12.
DA Davidson analyst Gil Luria highlights Oracle's approximately $550 billion backlog as a key AI growth driver, noting its core software business funds expensive data center builds.
The company has cut 20,000 to 30,000 jobs to streamline operations and support its aggressive pivot toward AI infrastructure expansion.
Technically, the stock is rebounding off the lower half of its 52-week range, trading above its 20-day and 100-day SMAs but still 16.6% below its 200-day SMA, with key resistance at $208 and support at $177.
Broad market sentiment is improving, with Nasdaq futures up 0.43% and S&P 500 futures up 0.36%, following Monday's volatility tied to U.S.-Iran tensions.

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So, Oracle Corp (ORCL) shares are edging higher on Tuesday morning. This comes after a dip on Monday that was mostly about geopolitical jitters—you know, the usual market noise that sometimes shakes things up. But today, investors seem to be refocusing on what Oracle is actually doing, and that's where things get interesting.

The $550 Billion Question

DA Davidson analyst Gil Luria is keeping his eye on the software giant's massive scale. In a recent CNBC appearance, he pointed out that Oracle is well-positioned to capture AI demand, and here's the kicker: the company currently has a backlog of approximately $550 billion. That's not a typo—$550 billion. Luria explained that Oracle's core software business effectively funds its expensive data center build-out. Think of it as using the cash cow to feed the future.

Spending Money to Make Money

Investors are closely tracking Oracle's aggressive pivot toward AI infrastructure. To streamline operations and support this expansion, the company has cut 20,000 to 30,000 jobs. Those savings aren't just for show; they're directly fueling the build-out of AI-ready data centers. It's a classic case of trimming fat to bulk up the muscle where it counts.

Market Mood Swing

Broad markets are showing signs of recovery on Tuesday. Nasdaq futures rose 0.43%, while S&P 500 futures gained 0.36%. This follows Monday's volatility tied to U.S.-Iran tensions and rising oil prices. So, it's not just Oracle—the overall sentiment is shifting, which often gives individual stocks a bit of a tailwind.

Reading the Charts

From a technical perspective, Oracle is rebounding off the lower half of its 52-week range after peaking in September. The stock is trading 18.2% above its 20-day simple moving average (SMA) and 4.7% above its 100-day SMA. The relative strength index (RSI), a momentum gauge, is at 69.70. Over the past 12 months, the stock is up 44.59%, which shows the longer-term tape has still rewarded holders despite the big drawdown from the $345.72 high. But here's the tension: price remains 16.6% below the 200-day SMA.

Key Resistance: $208
Key Support: $177

Oracle shares were up 0.87% at $179.12 during premarket trading on Tuesday, according to market data.