The open plains of Texas currently host roughly a third of all U.S. data center capacity under construction. Democrat Gina Hinojosa's victory in the Texas gubernatorial race over incumbent Greg Abbott—driven by campaign pledges to restrict data center power allocations and protect the ERCOT electric grid—sent Nasdaq futures tumbling 2% overnight.
High-leverage AI cloud builders took the immediate brunt of the sell-off, with CoreWeave (NASDAQ:CRWV) dropping 7% and Nebius Group (NASDAQ:NBIS) sliding 4%. Enterprise giant Oracle (NYSE:ORCL) was caught in the downdraft as well, shedding roughly 4%. Yet while the market sold these names in unison, speculative operators relying on single-state construction permits face a fundamentally different risk profile than an enterprise platform deploying cloud capacity across dozens of global jurisdictions.
That distinction is central to ProPicks AI's Tech Titans strategy. With the November rebalance now live, it holds Oracle alongside high-margin tech leaders such as a specialty semiconductor manufacturer up 3.2% in November, a mission-critical chip equipment leader and an essential enterprise collaboration software provider.
A Footprint Spread Across Clouds and Countries
Oracle sells database software, enterprise applications and cloud infrastructure to businesses worldwide. Its quarter ended August 31 brought record revenue of $19.3 billion, up 30%, while Oracle Cloud Infrastructure revenue jumped 121% to $7.4 billion, with GPU utilization at 97.9% and capacity renewing at a 20% premium to prior contracts. Non-GAAP operating margin held near 42% even as data center costs ramped.
Crucially, Oracle does not rely on a single domestic power grid to scale its infrastructure. Through its multicloud architecture, database revenue originating inside partner platforms surged 353% year-over-year. The company now operates 70 multicloud database regions embedded directly within Microsoft Azure, Google Cloud, and Amazon Web Services data centers worldwide.
That geographic and structural diversification insulates the company from regional political bottlenecks. While headquarters remain in Austin, management confirmed that localized site delays in New Mexico and Wisconsin will have zero impact on its target to deliver at least $90 billion in revenue for fiscal 2027.
Meanwhile, commercial demand continues to outpace physical supply. Remaining performance obligations (RPO)—Oracle's contracted revenue backlog—climbed by $209 billion over the past 12 months to an unprecedented $664 billion, with roughly half scheduled to convert into booked revenue within 36 months.
The Earnings Case and the Cash Flow Trade-Off
Despite that massive contract backlog, overnight headline selling left Oracle trading at an increasingly attractive valuation multiple. According to consensus analyst projections compiled on InvestingPro, Oracle's earnings per share are expected to climb from $8.14 in fiscal 2027 to $11.15 in fiscal 2028. That leaves the shares at a forward P/E of 16.0 for the current fiscal year and 11.7 for the next, with a PEG ratio of 0.41, a level usually read as growth priced cheaply. Wall Street price targets on InvestingPro run from $110 to $400, with an average of $233.16.
Cash flow is the weak spot. Capital spending of $28 billion outran a record $23 billion of operating cash flow in the latest quarter, leaving free cash flow at negative $5 billion, and full-year spending is guided to $90 billion to $95 billion. Oracle also completed a $20 billion at-the-market equity raise in the same quarter, which dilutes existing shareholders.
https://finance.yahoo.com/technology/ai/articles/texas-election-rattles-ai-data-082619854.html
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