Oracle’s $664 billion backlog sends a signal to Dell, HPE

Oracle's $664 billion backlog of performance obligations has sent a strong signal to Dell Technologies (DELL) and Hewlett Packard Enterprise (HPE), as both companies saw significant gains in their stock prices following Oracle's impressive fiscal Q1 results. Oracle's revenue increased by 30% to $19.3 billion, with cloud infrastructure revenue soaring 121% to $7.4 billion, and its remaining performance obligations rose to $664 billion.

This strong backlog suggests a potential read-through for Dell and HPE, as they both rely heavily on data center hardware and AI infrastructure to support Oracle's contracts.

Despite the positive outlook, there are concerns about the rising costs of borrowing and the Federal Reserve's actions, which could impact the businesses fueling the AI boom. Oracle reported providing an additional 850 megawatts of data center capacity and over 300,000 GPUs to AI cloud clients since the end of its previous quarter, as well as winning more than $30 billion in new AI-related cloud service contracts.

Dell Technologies, already experiencing rapid growth in its AI infrastructure business, reported record fiscal second-quarter revenue of $47 billion, up 58% year-over-year, and lifted its fiscal 2027 revenue forecast by $25 billion to $192 billion. HPE also reported record fiscal third-quarter revenue of $12.2 billion, up 34% from a year earlier, with Cloud & AI segment earnings up 25% and server revenue rising 35% to $6.77 billion.

Both companies are strengthening their partnerships with Nvidia to support their AI infrastructure growth.

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