Oracle just had its worst week since the dot com bust and this one of the most undervalued stock in the entire market (S…
Milk Road AI Twitter · Milk Road AI (@MilkRoadAI) · 2026-06-27
Milk Road AI argues Oracle is deeply undervalued after its worst stock week since the dot-com bust, citing a record $638 billion revenue backlog — 54% tied to a reported $300 billion OpenAI Stargate contract — while acknowledging substantial debt and counterparty concentration risks.
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Extraction
Topics: oracleai-infrastructurecloud-computingopenaienterprise-tech-valuation
Claims
- Oracle's remaining performance obligations (RPO) hit $638 billion, up 363% year over year.
- A reported $300 billion OpenAI Stargate contract accounts for approximately 54% of Oracle's entire backlog.
- Oracle burned $23.7 billion in negative free cash flow in FY2026 and carries $130 billion in debt.
- Oracle's cloud infrastructure revenue grew 93% year over year with 63% gross margins.
- Anthropic and OpenAI combined are generating approximately $80 billion in annualized revenue, reducing perceived default risk on the Stargate contract.
Key quotes
Oracle's RPO just hit $638 billion, up 363% year over year.
The single biggest driver is OpenAI, OpenAI signed a deal reportedly worth $300 billion in cloud compute from Oracle over five years roughly 54% of Oracle's entire backlog tied to one customer.
The market is pricing this like OpenAI defaults and the whole thing unwinds, that's possible. But Brad Gerstner's point, that Anthropic and OpenAI together are doing roughly $80 billion in annualized revenue, putting OpenAI around $30 billion ARR today suggests the default risk is much lower than the stock price implies.