Oracle data center pipeline rerouted to BLM land after rejections

0 min read | Published on 15 Aug 2026, 12:10 AM |Updated on 18 Aug 2026, 09:25 PM

Reviewed by

Ritika DScanX News Team

Key Highlights

Oracle's New Mexico gas pipeline for data centers is delayed to 2027 and rerouted to BLM land after earlier rejections. Energy Transfer LP will construct the 17.8-mile conduit. The delay impacts the energy supply timeline for the facility.

*this image is generated using AI for illustrative purposes only.

Oracle's gas pipeline project in New Mexico, designed to support its data center infrastructure, has been delayed until 2027 and rerouted following earlier rejections. Bloomberg News reported the schedule change on August 14, 2026, and confirmed the rerouting plan on August 18, 2026.

Energy Transfer LP, which will construct and operate the pipeline, is now seeking to build part of the 17.8-mile conduit on land administered by the U.S. Bureau of Land Management. This shift comes after the initial plan faced rejections, necessitating a change in route to proceed with the energy supply timeline for the facility.

The delay affects the energy supply timeline for the Oracle data center infrastructure. No further details regarding the specific cause of the earlier rejections or financial implications were provided in the source reports.

How might the 2027 completion timeline impact Oracle's ability to meet current hyperscale data center demand in the Southwest region?

What are the potential cost implications for Energy Transfer LP and Oracle due to the rerouting through Bureau of Land Management land?

Could this delay accelerate Oracle's adoption of alternative energy solutions, such as on-site renewable generation or battery storage?

AI Infrastructure and Capital Commitments

Market scrutiny has intensified around Oracle's Project Jupiter data center initiative. Despite media reports alleging a six-month delay into 2027 for a New Mexico gas pipeline supporting the project, Oracle confirmed that the data center project remains on schedule alongside its key partners.

The primary concern stems from the scale of Oracle's financial commitments to this buildout. The company expects capital expenditures of up to $95 billion in fiscal 2027. Additionally, future data center lease commitments have climbed to approximately $260 billion. These substantial outlays have resulted in negative free cash flow, raising questions about the sustainability of the current investment pace if demand does not match supply.

Michael Burry Short Position

Investor sentiment was further pressured by actions from "Big Short" investor Michael Burry. On August 13, Burry disclosed adding to his short position in Oracle at around $152. Burry has warned that the AI infrastructure boom could eventually create excess computing capacity, with 2028 serving as his base case for when "compute becomes too much." He believes markets could begin pricing in this risk sooner than the eventual capacity glut materializes.

Burry argues that Oracle's significant lease and capital commitments may become difficult to justify if AI capacity ultimately exceeds demand.

What the Numbers Show

The divergence between Oracle's growth metrics and its valuation profile is evident in recent analyst rankings. While the company holds a Growth score of 95.8, indicating strong earnings expectations, its Momentum score stands at just 6.81 and Value score at 19.03. This split suggests that while fundamental growth expectations remain high, recent price momentum is weak and the current valuation is perceived as less attractive by quantitative measures.

Technical Analysis

Technically, Oracle trades about 1.5% below its 50-day simple moving average (SMA) of $150.61. The stock is also 15.5% below its 200-day SMA of $175.47. However, it remains above its 20-day SMA of $136.53.

The 50-day SMA remains below the 200-day SMA following a death cross formation in January, keeping the longer-term technical picture bearish until key moving averages are reclaimed. The relative strength index stands at 52.07, a neutral reading indicating the stock is neither overbought nor oversold. Resistance sits near $149 and the 50-day SMA, while support is located around $135, close to the 20-day SMA.

Technical Indicator	Value
Current Price	$148.56
20-Day SMA	$136.53
50-Day SMA	$150.61
200-Day SMA	$175.47
RSI	52.07

Earnings and Analyst Outlook

Oracle's next earnings report is estimated for September 8. Wall Street expects earnings per share of $1.67, up from $1.47 a year earlier. Revenue is projected to rise to $19.13 billion from $14.93 billion in the prior year period.

The stock carries a Buy consensus rating with an average price forecast of $258.50. Recent analyst actions include:

UBS: Maintained a Buy rating on August 6 but lowered its price forecast to $245.
CLSA: Initiated coverage with a Hold rating and a $145 forecast on July 20.
Bernstein: Maintained an Outperform rating and raised its forecast to $325 on June 11.

ETF Exposure

Oracle represents a significant weighting in several technology-focused exchange-traded funds, meaning flows into these vehicles can impact share demand. Key exposures include:

iShares Expanded Tech-Software Sector ETF (IGV): 5.87% weighting
First Trust NASDAQ Technology Dividend Index Fund (TDIV): 5.21% weighting
FT Vest Technology Dividend Target Income ETF (TDVI): 4.49% weighting

How might Oracle's upcoming September 8 earnings report address investor concerns regarding the sustainability of its $95 billion capital expenditure plan for fiscal 2027?

Could Michael Burry's short position and prediction of an AI compute glut in 2028 trigger broader market skepticism toward other hyperscalers with similar infrastructure commitments?

What impact could a prolonged bearish technical trend, marked by the death cross and price action below the 200-day SMA, have on institutional ETF inflows into Oracle-heavy funds like IGV?