Three Signals That Will Define Oracle's Quarter

Investor focus will be squarely on the progress of the OpenAI Stargate project and its contribution to Oracle Cloud Infrastructure (OCI) growth. The Street will also be closely watching the impact on Remaining Performance Obligations (RPO) and any potential upward revision to the full-year CapEx guidance.

OCI revenue has already climbed from about 1.8 billion dollars in FY24 Q3 to more than 3.3 billion by FY26 Q1, with year on year growth running in the high 40s to mid 50s and current expectations pointing to another leg up toward roughly 70% in FY26 Q2E.

As Stargate ramps, Abilene campuses go live and GB300 capacity is delivered, the key is whether this shows up as broad based IaaS demand and higher utilization rather than a narrow set of AI mega clusters still in burn in. Investors will be watching the mix between AI and non AI workloads, GPU versus CPU infrastructure and any commentary on cluster utilization and operating leverage to judge how sustainable this OCI uplift really is.

Track RPO ex-OpenAI, AI deal mix, and the pace of RPO conversion into OCI revenue.

RPO has grown from around 80 billion dollars in FY24 Q3 to roughly 130 billion by FY25 Q3, before jumping to 455 billion in FY26 Q1 and a projected 500 billion plus in FY26 Q2E as AI contracts were layered in. With that kind of step change, the focus naturally shifts from the headline number to its composition and cash conversion.

The market will want to see how fast RPO excluding OpenAI and other mega customers is growing, what share of total RPO is tied to AI deals and how much of the backlog is expected to convert into OCI revenue over the next 12 to 24 months. Additional colour on cancellation clauses, repricing mechanisms and minimum spend commitments would directly address concerns that some of this AI RPO is "paper backlog" rather than revenue that will reliably flow through the P&L.

Evaluate a CapEx step up, separating cash from leases as data center and network buildout progresses.

On the investment side, Oracle's reported CapEx has moved from about 1.7 billion dollars in FY24 Q3 to more than 9.0 billion by FY25 Q4, with triple digit year on year growth through most of FY25 and only a modest step down pencilled in for FY26. That profile underlines how aggressively the company is building data centre and network capacity ahead of demand, but it also raises questions about leverage, free cash flow and the timing of returns.

This quarter the street will focus on how much of the spend is cash versus leases, how tightly CapEx is linked to contracted projects such as Stargate and whether management is prepared to outline a "peak CapEx" window as utilization improves. The clearer the mapping from CapEx to booked RPO and then to realized OCI revenue, the easier it is to view Oracle as a high return AI infrastructure play rather than simply a balance sheet heavy bet on the AI cycle.

Heading into Oracle's earnings report this Wednesday, the derivatives market signals intense anticipation characterized by an Implied Volatility of 63.65% that has surged to the 93rd percentile and significantly outpaced the 46.82% Historical Volatility.

This steep premium indicates that traders are actively pricing in a violent post-earnings move, yet the Put/Call ratio of 0.94 suggests a balanced battlefield where neither bulls nor bears have established a decisive directional edge amid the heavy trading volume.

Together these three threads on OCI growth from Stargate, the quality and conversion of RPO excluding OpenAI, and the trajectory of AI CapEx will decide whether Oracle is seen as a durable AI infrastructure compounder or as the most leveraged expression of the current AI cycle.

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