Oracle's Market Misprices Its Massive Contract Revenue

Oracle trades at roughly 13.8x forward earnings while sitting on $638B of contracted revenue (RPO). The company leverages third‑party capital and customer prepayments—about $75B of AI hardware and $260B of future data‑center lease commitments—to fund its buildout, reducing the burden on its own balance sheet.

Why it matters: However, the thesis hinges on utilization; if demand collapses, Oracle still must meet its lease obligations.