TLDR
- Oracle reported massive $455 billion revenue backlog, over 4x larger than previous year, boosting AI stock confidence
- Nvidia CEO Jensen Huang predicts $4 trillion AI infrastructure spending creating potential $1 trillion revenue opportunity
- NVDA shares gained 4% Wednesday as Oracle’s shock earnings eased AI spending slowdown concerns
- Oracle commits $35 billion capex for fiscal 2026, primarily targeting AI computing infrastructure and Nvidia chips
- Wall Street analysts expected only $180 billion Oracle backlog, making actual figure historically unprecedented
Nvidia shares surged 4% Wednesday following Oracle’s explosive earnings report that revealed unprecedented AI infrastructure demand. The chip giant’s rally came as Oracle disclosed $455 billion in total remaining performance obligations, crushing Wall Street expectations.
Oracle’s massive revenue backlog represents contracts already signed for future delivery. This figure shocked analysts who had projected around $180 billion in remaining obligations. Ben Reitzes of Melius Research called Oracle’s numbers “astounding” and “a very historic print.”
The cloud provider plans deploying $35 billion in capital expenditures during fiscal 2026. Most spending will target AI computing infrastructure, directly benefiting Nvidia’s GPU business. This commitment helps validate continued enterprise AI investment despite recent cooling concerns.
Infrastructure Spending Creates Massive Revenue Opportunity
Nvidia CEO Jensen Huang delivered bullish long-term predictions during the company’s latest earnings call. He forecasts AI infrastructure spending could reach $4 trillion by decade’s end as major customers accelerate platform investments.
Historical data shows Nvidia captures roughly 25% of data center spending. If Huang’s projections prove accurate, this creates a potential $1 trillion revenue opportunity for the semiconductor leader. The prediction gains credibility given Oracle’s massive contracted backlog.
Nvidia currently generates $130 billion in annual revenue, up from just $27 billion two years ago. Recent quarterly revenue climbed 56% to $46 billion, demonstrating sustained growth momentum across AI applications.
The company maintains market dominance through annual chip updates and comprehensive AI platform strategy. Nvidia launched Blackwell architecture last year and recently released Blackwell Ultra, with next-generation Rubin scheduled for 2025 delivery.
Oracle Results Validate AI Investment Cycle
Oracle’s revenue backlog directly impacts Nvidia’s growth outlook since cloud infrastructure requires massive GPU deployments. The $455 billion figure represents four times growth from comparable year-ago periods, indicating accelerating AI adoption across enterprise customers.
Wall Street had grown concerned about potential AI spending slowdowns following mixed signals from various technology companies. Oracle’s results help dispel these worries by demonstrating concrete customer commitments extending years into the future.
Nvidia’s stock has gained over 1,100% during the past three years as investors recognize the company’s central role in AI infrastructure buildouts. The Oracle validation provides additional confidence in Nvidia’s positioning for sustained revenue growth.
Energy efficiency remains a key competitive advantage for Nvidia’s chips. Huang emphasizes superior performance per watt compared to rivals, reducing total ownership costs for customers making multi-billion dollar infrastructure investments like Oracle’s planned $35 billion expenditure.
