Oracle Data Center Projects on Track in New Mexico and Wisconsin, 2027 Guidance Safe

Oracle Data Center Projects and Capacity Outlook

Current status of New Mexico and Wisconsin

• New Mexico appears operationally on track. Oracle said construction is making “very good progress” and that the data center is “definitely on track.” The remaining notable item is the air-permit process, which Oracle is pursuing with local regulators and the Dona Ana County community. The site is expected to use Bloom fuel cells for on-site power, with management citing low water consumption and low emissions as advantages. ¹

• Wisconsin is also described as on track. Unlike New Mexico, the project is not planned around on-site generation; Oracle is working with the grid and partners including the Public Service Commission, American Transmission Company, and We Energies to design and deliver the required power infrastructure. Oracle characterized data-center delivery in Wisconsin as “actually very on track and going well,” while acknowledging that the energy-design and delivery plan continues to evolve. ¹

• These are important projects, but they are not Oracle’s only sources of capacity. Management described New Mexico and Wisconsin as large sites of approximately one gigawatt each, but said Oracle has a broad portfolio of developments across the United States and internationally; neither site contributed to the 850 megawatts delivered in Q1. ² Oracle also emphasized that capacity at large campuses is delivered in phases over multiple quarters rather than arriving all at once, which reduces the risk that a delay at one site would create a single-quarter capacity shortfall equal to the entire project. ²

Could delays threaten the fiscal 2027 revenue guidance?

Management’s explicit answer is no. Oracle stated that neither New Mexico nor Wisconsin would affect its previously stated fiscal 2027 revenue or earnings guidance. The company had raised its full-year fiscal 2027 revenue outlook to at least $90 billion. ³⁴

That assurance is supported by several factors:

1. Diversified delivery pipeline: Oracle delivered 850 megawatts of AI capacity in Q1, despite New Mexico and Wisconsin not yet being included in that delivery. ² It also delivered more than 3,000 GPUs during the quarter, with Q1 delivery nearly three times Q4 delivery and equal to 73% of the prior fiscal year’s total capacity delivered. ⁵

2. Phased project ramp: Large campuses are expected to come online over multiple quarters, so a delay at one location should not automatically remove a full gigawatt of capacity from a single reporting period. ²

3. Risk-adjusted planning: Management said it does not assume every project milestone will be completed exactly on time, and that it maintains backup options and incorporates execution risk into its forecasting. ¹

The appropriate interpretation is that Oracle does not currently view New Mexico or Wisconsin as a fiscal 2027 guidance risk, rather than that delays are impossible. New Mexico still has a permitting process underway, and Wisconsin’s grid-delivery plan remains subject to ongoing coordination with utilities and regulators. ¹ Oracle also expressly cautioned that its forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. ⁶ Thus, the principal risk would be a broader or simultaneous failure across multiple sites, power arrangements, or alternative capacity sources—not merely a moderate delay at either individual project.

Confidence in supporting future RPO growth

Oracle expressed high confidence, stating that it remains “very excited and very confident” in its ability to meet both current RPO and expected future RPO growth. Management said the company is pursuing multiple avenues to bring capacity online as constraints have shifted from GPUs and semiconductor fabrication to power generation and data-center availability. ⁴

That confidence is supported by the following evidence:

• Strong current utilization and demand: GPU utilization was 97.9% in Q1, and more than $30 billion of additional AI contracts were signed without requiring additional capital from Oracle. ⁵

• Evidence of durable asset economics: All GPU capacity up for renewal in Q1 was either renewed or resold at a 20% premium to prior contracts, and the majority of those GPUs were at least four years old. ⁵ This suggests that Oracle is seeing continued demand and resale value rather than rapid obsolescence in its deployed AI infrastructure.

• Substantial execution capability already demonstrated: Oracle delivered 618 megawatts, representing 75% of the capacity, across six of eight Abilene campus buildings, and delivered 131,000 GPUs there in Q1, 1.9 times the Q4 volume. ⁵ The next gigawatt-scale campus, Shackleford, was also described as progressing well, with initial NVIDIA Vera system deliveries expected in Q2. ⁵

• RPO growth is not entirely dependent on Oracle-funded capacity: RPO increased by $26 billion from Q4, and management said the vast majority of new contracts used prepayments, bring-your-own-hardware arrangements, or similar structures that do not require incremental cash from Oracle. ⁷ Oracle clarified that this does not mean the associated infrastructure requires no capital expenditure; rather, suppliers or customers can help fund the hardware through financing arrangements, customer-owned equipment, or upfront payments. ⁸

• The business model is becoming more capital-flexible: Oracle said it has developed supplier relationships, financing arrangements, and bring-your-own-hardware models that separate the capital required for growth from Oracle’s own direct CapEx. Management therefore does not currently view Oracle’s own CapEx capacity as a fundamental limitation on business growth. ⁹

Important qualification: confidence does not eliminate capacity risk

Oracle’s confidence is credible in light of its current delivery record, diversified project base, customer prepayments, and high utilization. However, the company is operating in a constrained infrastructure environment: management specifically identified power generation and data-center availability as current constraints. ⁴ New Mexico depends on completion of permitting for its on-site generation, while Wisconsin depends on successful grid and utility coordination. ¹

Furthermore, Oracle said that approximately half of its RPO is expected to convert into sales over the next 36 months, while the new RPO added in Q1 is not expected to affect revenue or CapEx until fiscal 2028 or later. ⁷ This provides some near-term timing flexibility, but it also means future revenue conversion depends on Oracle and its partners continuing to secure power, equipment, sites, and financing at scale.

Bottom line

• New Mexico: Construction is on track, with air permitting still in process. ¹
• Wisconsin: Data-center delivery is on track, with grid-power design and implementation continuing with utilities and regulators. ¹
• Fiscal 2027 guidance: Management explicitly said neither project should affect the previously stated guidance, including the at-least-$90 billion revenue outlook. ³⁴
• Future RPO support: Oracle is highly confident, supported by 97.9% GPU utilization, rapid capacity delivery, strong contract demand, phased project deployment, and funding models that reduce the need for Oracle to finance all capacity directly. ⁴⁷⁸⁵
• Residual risk: The main concern is not a delay at either site in isolation, but a broader failure across multiple construction, permitting, power, supply-chain, or financing channels. Oracle’s statements reduce—but do not eliminate—that execution risk. ¹²⁶