Oracle can hit $90 billion of revenue if it keeps turning backlog into live megawatts. Cash stays negative, so the stock only works if the multiple holds near 18 times next year’s earnings.
Key points
- $664 billion of remaining performance obligations at August 31, with only about 13% due in twelve months.
- $90, 95 billion of gross capex guided for fiscal 2027; net cash capex capped at $70 billion after customer prepayments.
- 18 times fiscal 2028 non-GAAP earnings of about $9.80 a share produces the $182 target.
The call
The $144 price requires about 18 times the company’s own $8.10 fiscal 2027 non-GAAP EPS guide and assumes the $90 billion revenue floor is met while free cash flow stays deeply negative.
I expect revenue of $90 billion this fiscal year and $112 billion next, with non-GAAP EPS near $9.80, because delivered capacity and 98% GPU utilization convert backlog. The market is too pessimistic after the 50% drawdown from the high.
Revenue and free cash flow ($ billions)SEC filings through Q1 FY27; Grok FY27E uses company revenue guide and capex range
Valuation
| Item | Figure |
|---|
| Fiscal 2027 revenue (company floor) | $90 billion |
| Fiscal 2028 revenue (Grok, +25%) | $112 billion |
| Fiscal 2028 non-GAAP EPS (Grok) | $9.80 |
| Multiple on FY28 EPS | 18.5 times |
| 12-month target | $182 |
Eighteen times is a modest premium to a software-plus-infra mix that is still growing more than 25%. Asymmetry is modest: a miss on power delivery or a second equity raise would cut the multiple faster than earnings. That is a buy, not a strong buy.
Risks
- Power and permit delays (New Mexico, Wisconsin, Jupiter) would stall the 30, 34% Q2 growth guide.
- Customer prepayments reverse or fail to renew at the 20% premium management cited.
- Depreciation and interest on $125 billion of borrowings and $288 billion of uncommenced leases crush GAAP earnings.
What would change my mind
Fiscal 2027 revenue below $85 billion or a second large equity issuance would force a lower multiple and a sell.