Oracle shares climbed 39.9% in May after falling below $150 in April. The rebound followed OpenAI raising new funds, planning an IPO, and management claiming the company is on track with its revenue targets this year.
Oracle's cloud infrastructure revenue grew 81% in constant currency last quarter to $4.9 billion. The company has $553 billion in remaining performance obligations (contracts for future work), which grew 325% year over year last quarter, largely from OpenAI.
Oracle stock now trades at a price-to-earnings ratio of 41 and carries $125 billion in long-term debt. The company depends on OpenAI continuing to grow revenue and raise capital to pay for Oracle's data center infrastructure; if OpenAI's contracts are cancelled, Oracle's performance obligations could be at risk.
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