Oracle Wins DoD Deal, But Market Has Doubts Over Its AI-Buildout Cost

The DoD awarded Oracle a nearly $7 billion, decade-long enterprise software contract, a win that sent ORCL shares up briefly but leaves the stock far below its 2025 peak as the company pursues an aggressive AI infrastructure buildout that has driven free cash flow negative by about $24 billion. S&P downgraded Oracle to BBB- amid rising debt and a plan to raise tens of billions in 2027, while Oracle laid off thousands to meet financing needs. Cloud revenue rose sharply (about 93%), and remaining performance obligations climbed to $638 billion, suggesting real revenues from the contract, but analysts remain unsure whether this single deal can offset the broader cash burn and equity dilution facing Oracle in the coming years.