Shares of Nvidia (NVDA 3.91%) are rising on Wednesday, up 4% as of 2:13 p.m. ET. The gain comes as the S&P 500 and the Nasdaq Composite gained 0.3% and 0.1%, respectively.
The artificial intelligence (AI) chip giant's stock surged after Oracle reported earnings, revealing a revenue backlog that shocked Wall Street.
Oracle's spending signals strong GPU demand
Oracle reported earnings that included $455 billion in total remaining performance obligations (RPOs) -- essentially future revenue for which it is already contracted and now must deliver on. That figure is more than 4 times larger than it was during the same quarter last year. The cloud infrastructure provider plans to deploy $35 billion in capital expenditures (capex) during its fiscal 2026, with most of that going to AI computing infrastructure like Nvidia's chips.
The figure shocked investors and Street analysts who had been expecting $180 billion in RPO, a sizable amount, but dwarfed by what Oracle reported. Ben Reitzes of Melius Research spoke on CNBC's Closing Bell: Overtime, saying:
This is a very historic kind of print right here from Oracle with this backlog. ... The Street was looking for about $180 billion in RPO, and they're talking about a number that is a multiple of that. That is astounding.
Image source: Getty Images.
The AI investment cycle keeps rolling
Oracle's commitment helps cool fears in recent weeks that the AI data center spending spree was showing signs of slowing down, something that could hit Nvidia's bottom line hard. While the earnings print is encouraging, the risk of AI slowing down remains an issue.
Nevertheless, I believe Nvidia is still the best AI infrastructure stock to pick with a strong, durable moat.
