Remember when Oracle was that boring database company your IT department complained about? Well, plot twist: they just became the AI darling nobody saw coming.
Oracle’s stock absolutely exploded 33% in pre-market trading after they casually mentioned having $455 billion in AI contracts sitting in their back pocket. That’s not a typo – we’re talking about nearly half a trillion dollars.
Here’s what happened: Oracle missed their earnings per share by a measly penny (who cares?), but then dropped this nuclear bomb about their remaining performance obligations – fancy Wall Street speak for money we’re definitely going to make. This RPO number shot up 359% year-over-year, backed by four multi-billion-dollar AI cloud contracts.
Bank of America was so shocked they immediately upgraded Oracle to Buy this morning. When BofA moves that fast, you know something big is happening.
While Oracle was stealing the show, the broader market got some surprisingly good news. August’s Producer Price Index actually dropped 0.1% when everyone expected it to rise 0.3%. This inflation cooldown gives the Federal Reserve even more cover to cut rates this month.
Before you start planning your Oracle yacht purchase, let’s pump the brakes. These are contracts spread over multiple years, not a giant check tomorrow. Plus, we’re at that dangerous point where the Nasdaq just hit record highs and everyone’s feeling invincible.
Oracle just proved that in the AI gold rush, sometimes the companies selling the shovels make more money than the miners. Their $455 billion backlog is a massive vote of confidence from enterprise customers betting big on AI transformation.
Just remember: when everyone’s celebrating and stocks are hitting new highs, that’s usually when you want to be more careful, not less. Stay smart out there.