Less than a year ago, Oracle (NYSE: ORCL) was the blue-eyed boy of Wall Street, racking up a massive backlog amid strong demand for its artificial intelligence (AI) compute infrastructure.
The stock reached a 52-week high on Sept. 10, 2025, following an impressive 97% jump since the beginning of the year
The phenomenal jump in Oracle stock last year was fueled by the stunning growth in the company’s remaining performance obligations (RPO). Major hyperscalers and AI companies were awarding Oracle massive contracts to secure AI computing capacity in its data centers, which explains why its RPO was growing faster than its revenue. However, it wasn’t long before Wall Street started casting doubts on Oracle’s ability to convert its huge revenue backlog into revenue.
Its multibillion-dollar deals with OpenAI came under scrutiny, as investors wondered whether the AI start-up would be able to raise the money to pay Oracle. Additionally, Oracle’s debt-fueled AI infrastructure build-out has been another cause for concern. These factors explain why this AI stock has retreated 43% from its 52-week high in September last year.