Cloud and software giant Oracle (ORCL) is moving forward with an AI data center in New Mexico, despite having a hard time getting enough energy to supply the site. Project Jupiter, as it is known, could eventually involve up to $165 billion of investment and use roughly 2.5 gigawatts of natural-gas-powered fuel cells. However, the 17.8-mile Green Chile pipeline needed to supply the campus has now been rerouted after New Mexico regulators rejected its proposed path twice.

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As a result, the pipeline's targeted start date has also been pushed from August 15 to February 1, 2027, according to Bloomberg. Nevertheless, Oracle maintains that Project Jupiter itself remains on schedule.

Importantly, the new route is designed to avoid the land that is controlled by the New Mexico State Land Office, which said that the previous proposal was not in the state's best interests. Energy Transfer (ET), whose Transwestern subsidiary would build the pipeline, is now looking to use federally managed land.

This matters because Project Jupiter is being built to support OpenAI's demand for computing power. However, more AI demand means that Oracle must build infrastructure much faster, and the pipeline issue shows how permitting issues can slow down progress.

Oracle's AI Expansion Is Becoming Expensive

The AI demand also means that Oracle has to spend heavily in order to build the infrastructure. In fact, the company spent $55.7 billion on capital expenditures during Fiscal 2026, which pushed free cash flow to negative $23.7 billion. In addition, Oracle raised $43 billion through debt and another $5 billion from stock sales. It now expects to raise roughly $40 billion more through debt and equity during the current fiscal year.

This has also caused Oracle to try to control costs elsewhere. Business Insider recently reported that another round of layoffs is being prepared, with some teams potentially facing double-digit percentage reductions. That follows a 21,000-person decline in Oracle's workforce during Fiscal 2026, which was equal to roughly 13% of employees.

Still, Oracle believes the spending is necessary because demand remains strong. More specifically, Cloud Infrastructure revenue surged by 77% during Fiscal Year 2026, while total revenue grew by 17%.

Is ORCL Stock a Good Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on ORCL stock based on 27 Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average ORCL price target of $258.14 per share implies 79.3% upside potential. (See ORCL Stock Forecast).