Oracle's remaining performance obligations rose $209 billion to $664 billion in its fiscal first quarter, lifting Dell Technologies and Hewlett Packard Enterprise shares immediately. The same results exposed a financing gap that ties Dell and HPE's own order books to the Federal Reserve's rate decisions, as Oracle shares fell further this week on new layoffs and cash-flow concerns.
Oracle reported total revenue up 30% to $19.3 billion and cloud infrastructure revenue surging 121% to $7.4 billion in its fiscal first quarter. Dell's stock soared 12% on Sept. 11 after the results landed. Oracle also delivered over 300,000 GPUs to AI cloud clients and added 850 megawatts of data center capacity in the quarter.
Dell and HPE post matching order books
Dell's own numbers echoed the trend: the company reported record fiscal second-quarter revenue of $47 billion, up 58% year-over-year, with a $95 billion AI server backlog, and consequently lifted its fiscal 2027 revenue forecast by $25 billion to $192 billion. HPE told a similar story, posting record fiscal third-quarter revenue of $12.2 billion, up 34%, as its Cloud & AI segment grew 25% to $9.04 billion. Its Cloud & AI operating margin expanded to 17% from 7% a year earlier. HPE CEO Antonio Neri told investors AI is a "multiyear growth driver" even as supply constraints slow demand fulfillment.
The backlog's cash cost catches up with Oracle
Yet Oracle's own quarter shows what that demand costs to fund. The company posted record operating cash flow of $23 billion, but free cash flow was negative $5 billion. Only about 12% of the $664 billion backlog is expected to convert to revenue in the next 12 months. Oracle raised $43 billion in debt and $5 billion in equity in fiscal 2026 and expects to raise roughly $40 billion more in debt and equity in fiscal 2027, which is why higher borrowing costs weigh on Dell and HPE too, not just Oracle.
Shares slide as the Fed meets this week
Oracle shares fell further after the company confirmed a new round of layoffs, with cuts reaching double-digit percentages on certain teams. The stock slid to an intraday low of $141.18, down from a prior close of $150.28. The Federal Reserve left its benchmark rate unchanged at 3.5% to 3.75% at its July meeting, and its next policy meeting is scheduled for Sept. 15-16.
Sources: TheStreet, Crypto Briefing, Investing.com
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