Oracle Stock Is Selling Off on Its Massive AI Spending Plans. Here's Who Gets Paid When Oracle Spends.

Oracle (NYSE: ORCL) shares are selling off. The database giant reported results for its fiscal fourth quarter of 2026 (the period ended May 31, 2026) Wednesday afternoon. The stock fell as much as 11% in early trading Thursday and finished the trading day down about 8.5%.

The quarter itself wasn't weak. Revenue rose 21% year over year to $19.2 billion, with cloud revenue jumping 47% to $9.9 billion. And remaining performance obligations (contracted revenue the company hasn't yet delivered) ballooned to $638 billion -- up $85 billion in just three months.

Instead, investors seem focused on the bill. Oracle's capital expenditures hit $55.7 billion in fiscal 2026 -- above the $50 billion management forecast in March -- and free cash flow came in at negative $23.7 billion. Further, spending is set to climb again in fiscal 2027, with management guiding for a net cash outlay of about $70 billion after customer prepayments. And Oracle plans to raise about $40 billion in new debt and equity.

But every dollar of that spending lands on a supplier's income statement. Here's a closer look at three companies positioned to capture it.

Image source: The Motley Fool.

1. Nvidia

The most obvious beneficiary is AI (artificial intelligence) chipmaker Nvidia (NASDAQ: NVDA). Oracle's flagship Zettascale10 superclusters -- including the system behind OpenAI's Stargate site in Texas -- are built on Nvidia hardware, with initial deployments targeting up to 800,000 of the chipmaker's graphics processing units (GPUs). On the fiscal fourth-quarter earnings call, Oracle co-CEO Clay Magouyrk said the company intends to bring almost one gigawatt of capacity online this quarter -- about as much as it added in all of fiscal 2026.

Notably, most of Oracle's recent contract growth came from large AI deals in which the customer either prepaid for the GPUs or bought the chips and supplied them to Oracle directly. Those portions of its contracts now total $75 billion. In other words, the chips get bought whether or not Oracle fronts the cash.

Nvidia, of course, has already been demonstrating an inflection in sales. In its fiscal first quarter of 2027 (the period ended April 26, 2026), revenue grew 85% year over year to $81.6 billion, and data center revenue soared 92% to $75.2 billion as its Blackwell platform ramped.

2. Advanced Micro Devices

Advanced Micro Devices (NASDAQ: AMD) may have the most direct claim on Oracle's checkbook. Last October, the two companies said Oracle's cloud unit will be a launch partner for the first publicly available AI supercluster built on AMD's Instinct MI450 GPUs, with an initial deployment of 50,000 chips starting in the third quarter of calendar 2026 -- a window that opens next month.

AMD's data center revenue rose 57% year over year to $5.8 billion in the first quarter, driven by its EPYC server processors and Instinct GPU shipments. But the MI450, paired with the company's Helios rack systems, is the launch investors are watching.

"Customer engagement around MI450 Series and Helios is strengthening," said AMD chair and CEO Lisa Su in the company's first-quarter earnings release, adding that leading customer forecasts were exceeding AMD's initial expectations.

3. Dell Technologies

GPUs don't go into data centers alone. They arrive inside servers and racks from companies like Dell Technologies (NYSE: DELL). The infrastructure specialist booked $24.4 billion of AI orders in its fiscal first quarter of 2027 (the period ended May 1, 2026) and recognized $16.1 billion of AI server revenue. Dell now expects about $60 billion of AI server revenue this fiscal year, up from its prior $50 billion forecast.

"We exited the quarter with a record $51.3 billion of AI backlog," said Dell vice chairman and chief operating officer Jeff Clarke in the company's fiscal first-quarter earnings call. He added that Dell's pipeline remains multiples of that backlog and that the company's constraint in the second half is securing components, not finding demand.

Dell doesn't break out AI orders by customer. But the data center construction wave Oracle is helping fund is exactly the market Dell sells into.

The suppliers get paid first

So, what should investors make of a customer whose spending is climbing while its stock is punished for it?

Suppliers book revenue when hardware ships. Oracle recoups its investment only as customers consume contracted cloud services over many years. While the market debates whether $638 billion of contracts will convert into profitable revenue, the chip and server makers will have already been paid.

Of course, supplier exposure carries its own risks. If AI demand disappoints or financing tightens, hardware orders could slow quickly -- and Oracle's plan to raise about $40 billion is a reminder that this spending leans on a willing capital market.

Overall, I think the suppliers offer a simpler way to benefit from Oracle's build-out than Oracle itself. After all, the spending plans that spooked Oracle investors this week are the same ones filling its suppliers' order books.

Daniel Sparks and his cliens have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Oracle. The Motley Fool has a disclosure policy.