# Microsoft and Oracle end quarter with record backlogs, differing AI risk profiles

Digest AI · Business & Funding · published 2026-10-25T16:45:00Z

Canonical: https://digestai.news/story/microsoft-and-oracle-end-quarter-with-record-backlogs-differing-ai-ris

## Summary

Microsoft and Oracle both finished their latest quarter with record backlogs, $678B and $664B respectively. Microsoft’s fiscal Q4 revenue reached $90.01B, up 17.8%, and Azure grew 43%. The quarter produced $19.64B in free cash flow, and Copilot passed 30 million paid seats, indicating AI is monetizing in Office and data centers. 

Oracle’s cloud infrastructure revenue grew 121% and GPU usage hit 97.9%. However, $28.50B of capex turned free cash flow negative at $5.40B, and license revenue fell 15% as older software moves to the cloud. Oracle relies on a few large AI contracts and finished a $20 billion at‑market stock sale.

The author notes Oracle shares fell 54.35% over the past year, while Microsoft gained 1.59%. Oracle trades at about 18x forward earnings versus 25x for Microsoft, reflecting balance‑sheet risk. The analysis prefers Microsoft for steadier AI exposure due to diversified revenue and positive cash flow.

## Key points

- Microsoft reported $678B commercial RPO, Oracle $664B, both record backlogs.
- Microsoft revenue $90.01B, Azure grew 43%, free cash flow $19.64B; Oracle cloud revenue 121%, capex $28.50B, free cash flow negative $5.40B.
- Oracle shares fell 54.35% last year, Microsoft gained 1.59%; Oracle trades at 18x, Microsoft at 25x forward earnings.

## Why it matters

The comparison highlights how Microsoft’s diversified revenue and positive cash flow support its AI expansion, while Oracle’s heavy capex and reliance on a few large contracts expose it to higher risk, influencing investor sentiment and future AI infrastructure competition.

## Sources

1. [Microsoft Vs. Oracle: Massive Backlog Fortunes With Vastly Different Risk Profiles](https://247wallst.com/investing/2026/10/26/microsoft-vs-oracle-massive-backlog-fortunes-with-vastly-different-risk-profiles) (247wallst.com, 2026-10-25)

Part of the developing story: [Microsoft AI Spending Cuts and Growth Gamble](https://digestai.news/thread/microsoft-directs-azure-software-teams-to-cut-costs-by-20-amid-ai-spending) (3 stories)

## Cite

Digest AI, "Microsoft and Oracle end quarter with record backlogs, differing AI risk profiles", 25 October 2026, https://digestai.news/story/microsoft-and-oracle-end-quarter-with-record-backlogs-differing-ai-ris

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