Strong Growth in Cloud and AI Infrastructure

Oracle has returned an estimated $163 billion to shareholders through dividends and share buybacks over the past decade, highlighting how the software and cloud services provider has steadily prioritized investor value. The figure reflects a combination of consistent dividend payouts and one of the largest stock repurchase programs in the technology sector. For investors, this return underscores not only the company’s financial strength but also its ability to adapt as demand shifts toward cloud infrastructure and artificial intelligence services.

The announcement comes at a time when Oracle’s performance in cloud contracts and long-term backlog has drawn significant attention from the market. The company reported that its remaining performance obligations surged to $455 billion in its fiscal 2026 first quarter, an increase of more than 350 percent year over year. This combination of steady shareholder rewards and strong forward growth has placed Oracle in the spotlight among tech giants competing for the cloud and AI market.

The $163B Return: Where It Comes From

Oracle’s estimated $163 billion return to shareholders is built on two principal mechanisms: regular dividend payments and aggressive share repurchases. Over the past decade, the company has used its cash flows not just to invest in growth, but also to return capital to investors. Institutional analysts have credited this “shareholder-centric” approach for much of Oracle’s long-term appeal.

Dividend payouts provide a steady cash return to shareholders. Oracle has maintained a history of increasing or sustaining its dividend over time, reinforcing trust among income-seeking investors. Meanwhile, buybacks reduce the number of outstanding shares, thereby increasing the earnings per share for remaining holders, and often supporting the stock price.

Of course, these returns did not emerge in isolation. Oracle’s ability to allocate so much capital to shareholder returns depends on strong cash flow and profitable operations. In the first quarter of fiscal year 2026, Oracle reported operating cash flow over the prior twelve months of about $21.5 billion, up 13 % from a year earlier. Its total revenue reached $14.9 billion, climbing 12 % year over year. (These figures come from Oracle’s investor relations disclosures.)

Another key factor is Oracle’s massive backlog of contracted business that has yet to be recognized as revenue. Its remaining performance obligations (RPO) stood at $455 billion, rising 359 % year over year. That backlog gives Oracle visibility into future revenue streams and confidence in its ability to sustain cash flows. Among its recent wins, Oracle signed four multi-billion-dollar cloud contracts in just one quarter, helping fuel the growth in its RPO.

Together, the mix of steady cash generation, a strong contracted backlog, and deliberate financial policy has enabled Oracle to deliver the $163 billion figure. The next sections will examine what underpins this growth and what risks may challenge it.

The Transformation Behind the Returns

Oracle’s ability to deliver large returns to shareholders rests on more than just financial discipline. The company has changed its business in ways that increase visibility into future revenue, shift the mix toward faster-growing cloud and infrastructure services, and commit to multiyear contracts.

In its first quarter of fiscal 2026, Oracle reported cloud revenue (including Infrastructure as a Service and Software as a Service) rose 28% year over year to about $7.2 billion, while total revenue grew approximately 12% to $14.9 billion. Its cloud infrastructure segment alone increased 55% to roughly $3.3 billion.

A key piece of Oracle’s transformation is its backlog of contracted but unrecognized business. Its remaining performance obligations (RPO) surged roughly 359% year over year to $455 billion. That backlog includes large multiyear cloud infrastructure deals, some signed during the quarter.

Oracle is making strong forward-projections for the cloud infrastructure business. The company expects Oracle Cloud Infrastructure (OCI) revenue to grow 77% in fiscal 2026, to about $18 billion, and forecasts even larger figures in subsequent years. Much of this projected revenue is already secured in RPO.

Another part of the shift is in how Oracle’s legacy software / support business is behaving. That segment is shrinking slightly in some metrics even as cloud and infrastructure services grow more rapidly. Committing to cloud and infrastructure has required increased capital expenditures to build and maintain data centers, scale infrastructure, and handle AI and compute-intensive workloads.

Together, these elements explain how Oracle moved from being seen primarily as a software or database vendor, to an enterprise cloud and infrastructure provider with high revenue visibility and growing demand. That transformation is what underlies Oracle’s ability to return large sums of capital to investors, through both buybacks and dividends.

Risks, Nuances & Criticisms

Oracle’s strong returns come with several risks and areas of concern that investors should keep in mind. One major issue is valuation. Some analysts believe the market may be overestimating Oracle’s cloud growth, particularly in its AI infrastructure business. For example, Rothschild & Redburn initiated coverage with a “Sell” rating and set a $175 price target, implying a potential 40 % downside from then-current levels.

High capital expenditures (capex) represent another risk. Oracle’s capex has been rising sharply as the company builds data centers and scales cloud infrastructure. In fiscal 2025 the company spent more than $21 billion, and S&P expects it to approach $27 billion in fiscal 2026. These large outlays reduce free operating cash flow and can strain profitability in the near term.

There is also concern about free cash flow. Some recent reporting shows periods of negative free cash flow, especially in quarters with heavier investment spending.

Counterparty risk emerges because many of Oracle’s large AI and cloud contracts are linked to a small number of major clients. If those deals do not deliver as expected or if partners shift strategies, Oracle’s future revenue could be more volatile. In addition, competition from AWS, Microsoft Azure, and Google Cloud remains intense. These rivals have larger clouds, broader global infrastructure, and vast resources.

Finally, regulatory and security risks are non-trivial. Recent cybersecurity events, including targeted extortion emails to Oracle customers, highlight vulnerability to threats. 

These risks do not negate Oracle’s successes, but they temper expectations about how smoothly Oracle can sustain returns at current levels.

Outlook & What’s Next

Oracle has set aggressive growth targets for its cloud infrastructure business. In its fiscal 2026 outlook, the company expects Oracle Cloud Infrastructure (OCI) revenue to rise 77 percent to $18 billion, with forecasts stretching that growth to $144 billion over the next few years.

A cornerstone of that ambition is a large contract signed with OpenAI, reportedly covering $300 billion in computing services over five years. This deal positions Oracle as a major player in AI infrastructure. Oracle is also said to be in negotiations for a $20 billion cloud agreement with Meta, which, if finalized, would further expand its footprint in large-scale AI deployment.

To support this growth, the company is making heavy capital investments. It has committed to expanding its infrastructure in Europe, including $2 billion earmarked for Germany over the next five years. However, much of the expansion is being financed via debt. Analysts estimate Oracle may issue up to $100 billion in borrowing over the next four years to support data center builds.

Leadership changes may also shape the company’s path forward. In September 2025, Oracle appointed Clay Magouyrk and Mike Sicilia as co-CEOs, shifting Safra Catz to executive vice chair. Magouyrk previously led Oracle’s cloud infrastructure business.

Looking ahead, much depends on execution. Key metrics to watch include contract signings, RPO growth, infrastructure build-out, and cash flow trends. If Oracle can deliver on its large AI-cloud deals while keeping capital costs under control, the $163 billion delivered so far could be the first chapter of continued shareholder returns.