BY SRH
The Bubble is Building, Another Force Majeure on $165 Billion Jupiter Data Center Project by Oracle…
Oracle just put a “force majeure” notice on its $165 billion flagship data center, and the debt used to pay for it is already trading below par. Which number you trust more will tell you if that means chance or a falling market.
Oracle is an enterprise software company that also sells cloud infrastructure and database technologies. On the heels of a record-breaking backlog of AI training, the stock rose through the year 2025, but it eventually unwound as investors questioned the delivery capacity and expenses. It is the headline of today that gives a name to that anxiety.
Despite the fact that Project Jupiter was intended to generate 2.45 gigawatts of power and was scheduled to go online in 2028, it was unsuccessful in obtaining a crucial permission for energy resources and debt finance that was trading at less than 90 cents on the dollar. It would appear that the notice is intended to postpone payments in the event that the project does not fulfill the deadline of 2028. Management added “Neither of these sites will have any impact into our previously stated FY27 revenue or earnings guidance.”
Revenue increased by 29.61% to $19.345 billion in the first quarter of fiscal year 2027, cloud revenue increased by 62% to $11.607 billion, and cloud infrastructure increased by 121%. Due to the fact that more than $30 billion in new artificial intelligence contracts were recorded in a single quarter, remaining performance commitments reached $664 billion, which is an increase of $209 billion year over year. The non-GAAP earnings per share of $1.92 were 10.4% higher than the projections. A forward earnings multiple of 18 and a price-to-earnings ratio of 0.833 are reflected in the full-year projection, which calls for a minimum of $90 billion in revenue and $8.10 in earnings per share.
In the first quarter, Capex amounted to $28.499 billion, resulting in a negative $5.396 billion free cash flow. Interest expense increased by 55% to $1.4 billion. The free cash flow for FY26 was negative $23.686 billion. Revenue from software licenses decreased by 15%. Oracle conducted a $20 billion at-the-market equity program to finance its expansion; however, the stock has declined by 55.44% in the past year. RPO becomes theoretical if Jupiter’s issues continue to escalate.
Bulls possess an actual backlog and an average price target of $237.97. The flagship project of the bears is financed by distressed debt, and their chart is broken. A modest dividend and potentially a rally on resolution are the costs of waiting a quarter. Be Careful.
