Oracle’s stock slid after reports of large cloud commitments and ambitious long-term targets. The company’s record contract backlog supports multiyear growth. Despite high expectations, a small position may be wiser than a big bet on Oracle. The stock fell about 7% after a week of bullish headlines on AI and cloud computing.

Oracle’s growth is driven by its cloud infrastructure, but funding the build-out raises concerns. The company’s recent surge in remaining performance obligation reflects contracted revenue. Oracle aims for $166 billion in cloud infrastructure revenue by 2030. Despite strong demand, execution challenges and competition loom.

Despite strong demand and long contract durations, Oracle’s stock fell on Friday. The $65 billion in new commitments show a diverse customer base beyond OpenAI. RPO figures surged 359% to $455 billion, signaling multiyear revenue growth. Concerns about funding the capacity build-out and profitability persist.

Investors face risks related to Oracle’s capital spending, free cash flow pressure, and execution challenges. The stock’s valuation remains high despite the recent pullback. Oracle’s market capitalization is around $830 billion, up significantly from a year ago. The company’s ability to convert demand into revenue at healthy margins is key.

Oracle’s stock may be worth considering after the recent sell-off. The backlog of large customers and multiyear growth potential support a position in Oracle Cloud Infrastructure. However, high expectations and substantial capital requirements suggest starting with a small position and adding gradually based on performance.

The Motley Fool’s Stock Advisor team didn’t include Oracle in their top 10 stock picks. The team identifies stocks with potential for significant returns. Consider starting small with Oracle given the execution risks and high capital requirements. The total average return of Stock Advisor is 1,055%, outperforming the S&P 500 significantly.

Read more at Yahoo Finance: Is Now the Time to Buy Oracle Stock?