Oracle (ORCL) AI Stock Analysis

• Market Cap: $439.75B
• Dividend Yield: 1%
• Average Volume (3M): 30.03M
• Price to Earnings (P/E): 27.9
• Beta (1Y): 1.48
• Revenue Growth: 11.08%
• EPS Growth: 29.56%
• Country: US
• Employees: 159,000
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 1.79
• Shares Outstanding: 2,876,046,000
• 10 Day Avg. Volume: 34,727,271
• 30 Day Avg. Volume: 30,027,848
• PEG Ratio: 2.17
• Price to Book (P/B): 22.57
• Price to Sales (P/S): 8.04
• P/FCF Ratio: -1.17K
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 8.80
• Enterprise Value/Gross Profit: 13.25
• Enterprise Value/Ebitda: 19.25
• 1Y Price Target: $248.68
• Price Target Upside: 60.32% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 31
• EPS Forecast (FY): 7.48
• Revenue Forecast (FY): $67.20B

• Rating: 63 Neutral
• Price Target: $174.00 ▲(12.18% Upside)
• Action: Reiterated Date: 03/12/26
• Date: Action: Reiterated 03/12/26

The score is held back mainly by financial risk—very high leverage and sharply negative TTM free cash flow—despite strong profitability. Offsetting this, the latest earnings call was notably upbeat with rapid cloud/AI growth and a very large RPO backlog. Technicals are mixed (below key longer-term moving averages with negative MACD), while valuation appears moderately demanding (P/E ~27.9) with only a modest dividend yield.

Positive Factors

Cloud & AI revenue acceleration

Extraordinary multicloud database and AI infrastructure growth demonstrates strong product-market fit for Oracle's cloud stack and high-demand workloads. Durable adoption of higher-margin database and AI services can drive sustained subscription and consumption revenue, expanding recurring revenues and improving long-term margin mix.

Large RPO backlog

A $553B RPO backlog signals multi-year revenue visibility and customer prepayments that anchor future subscription and services sales. This structural backlog supports predictable cash flow conversion as capacity and deliverables are fulfilled, enabling longer-term planning and commercial leverage.

Recurring cloud apps run-rate and go‑lives

A $16.1B run-rate across Fusion, NetSuite and industry SaaS with thousands of go‑lives reflects broad-based enterprise adoption and sticky subscription economics. This recurring revenue base supports steady cash flows, cross-sell opportunities, and resilience vs. point-software sales over the medium term.

Negative Factors

Very high leverage

Extremely large absolute debt and a ~3.9x debt-to-equity ratio materially reduce financial flexibility. High leverage amplifies refinancing and interest-rate risk, constrains allocation to growth or returns during stress, and is especially concerning given a volatile equity base in prior years.

Negative trailing‑12‑month free cash flow

Sharp negative free cash flow erodes self-funded capacity to service debt, fund capex, or return capital. Even with positive operating cash flow, heavy investing or other uses have drained free cash, increasing reliance on external financing which can be costly or dilutive if conditions tighten.

Capital intensity and execution complexity

Rapid capacity build-out, global site construction, manufacturing scale-up and supply constraints create sustained execution risk. While partner funding mitigates some cost, delays or cost overruns in delivering AI capacity can pressure margins, extend the cash drain period, and slow monetization of the RPO backlog.

Oracle Business Overview & Revenue Model

Company Description

Oracle Corporation offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software as a service offering include various cloud software applications, including Oracle Fusion cloud enterprise resource planning (ERP), Oracle Fusion cloud enterprise performance management, Oracle Fusion cloud supply chain and manufacturing management, Oracle Fusion cloud human capital management, Oracle Advertising, and NetSuite applications suite, as well as Oracle Fusion Sales, Service, and Marketing. The company also offers cloud-based industry solutions for various industries; Oracle application licenses; and Oracle license support services. In addition, it provides cloud and license business' infrastructure technologies, such as the Oracle Database, an enterprise database; Java, a software development language; and middleware, including development tools and others. The company's cloud and license business' infrastructure technologies also comprise cloud-based compute, storage, and networking capabilities; and Oracle autonomous database, MySQL HeatWave, Internet-of-Things, digital assistant, and blockchain. Further, it provides hardware products and other hardware-related software offerings, including Oracle engineered systems, enterprise servers, storage solutions, industry-specific hardware, virtualization software, operating systems, management software, and related hardware services; and consulting and customer services. The company markets and sells its cloud, license, hardware, support, and services offerings directly to businesses in various industries, government agencies, and educational institutions, as well as through indirect channels. Oracle Corporation was founded in 1977 and is headquartered in Austin, Texas.

How the Company Makes Money

Oracle primarily makes money from recurring subscriptions and support contracts, complemented by cloud usage-based revenue, software licenses, and professional services. Its largest revenue streams are typically (1) Cloud Services and License Support: ongoing fees for technical support, updates, and maintenance for Oracle’s on-premises software, plus subscription revenue from Oracle Cloud services; (2) Cloud License and On-Premise License: revenue from licensing Oracle software for customer deployment (including term or perpetual-style arrangements, depending on contract structure), increasingly oriented around subscription licensing; (3) Hardware: sales of engineered systems and server/storage products (where applicable), generally a smaller portion of revenue relative to software and cloud; and (4) Services: consulting, implementation, and other professional services that help customers deploy, migrate, and optimize Oracle products (including cloud migrations). Oracle’s cloud business includes Infrastructure-as-a-Service (compute, storage, networking) and Platform-as-a-Service (notably database services), which are monetized largely through subscriptions and consumption/usage. A key earnings driver is the installed base of Oracle database and enterprise application customers that renew support and increasingly migrate workloads to Oracle Cloud; strategic go-to-market and technology partnerships (e.g., cloud interconnects and collaboration agreements with other major cloud and software providers) can support customer adoption and, in turn, subscription and consumption growth.

Oracle Financial Statement Overview

Summary

Strong revenue scale and profitability (revenue up to $57.4B FY2025; ~25% TTM net margin; ~26% EBIT margin), but financial flexibility is pressured by very high leverage (TTM debt ~$153.1B; ~3.9x debt-to-equity) and a sharp deterioration in free cash flow (TTM FCF about -$24.7B) despite positive operating cash flow.

Income Statement

ORCL shows solid top-line momentum with revenue rising from $40.5B (FY2021) to $57.4B (FY2025), and 5.0% growth in TTM (Trailing-Twelve-Months). Profitability is strong: TTM net margin is ~25% with EBIT margin ~26%, reflecting good operating leverage for a software infrastructure business. The main weakness is some margin volatility across periods (e.g., FY2021 unusually high net margin vs. lower levels in later years), which suggests earnings can be influenced by mix and/or non-operating items.

Balance Sheet

The balance sheet is the biggest pressure point. Leverage is high, with total debt at ~$153.1B in TTM (Trailing-Twelve-Months) and debt-to-equity at ~3.9x (and even higher in several prior years). Equity has also been volatile (including negative equity in FY2022), which makes the capital structure less resilient in a downturn and can amplify risk if rates or refinancing conditions tighten. Offsetting this, reported return on equity is very high in most years, but that is partly a function of the thin/volatile equity base rather than purely improving fundamentals.

Cash Flow

Operating cash flow is consistently positive (TTM about $23.5B), supporting ongoing operations. However, free cash flow is a major concern: it turns sharply negative in TTM (Trailing-Twelve-Months) at roughly -$24.7B, after being near breakeven in FY2025 and solidly positive in FY2021–FY2024. This implies a step-up in cash uses (likely investment and/or other outflows), and the current period’s cash generation is not translating into free cash that can comfortably service debt, return capital, or build balance sheet flexibility.

Breakdown	TTM	May 2025	May 2024	May 2023	May 2022	May 2021
Income Statement
Total Revenue	64.08B	57.40B	52.96B	49.95B	42.44B	40.48B
Gross Profit	42.57B	40.47B	37.82B	36.39B	33.56B	32.62B
EBITDA	29.31B	23.91B	21.39B	18.74B	13.53B	18.41B
Net Income	16.21B	12.44B	10.47B	8.50B	6.72B	13.75B
Balance Sheet
Total Assets	245.24B	168.36B	140.98B	134.38B	109.30B	131.11B
Cash, Cash Equivalents and Short-Term Investments	39.13B	11.20B	10.66B	10.19B	21.90B	46.55B
Total Debt	162.16B	104.10B	94.47B	90.48B	75.86B	84.25B
Total Liabilities	206.19B	147.39B	131.74B	132.83B	115.06B	125.16B
Stockholders Equity	38.49B	20.45B	8.70B	1.07B	-6.22B	5.24B
Cash Flow
Free Cash Flow	-24.74B	-394.00M	11.81B	8.47B	5.03B	13.75B
Operating Cash Flow	23.51B	20.82B	18.67B	17.16B	9.54B	15.89B
Investing Cash Flow	-45.16B	-21.71B	-7.36B	-36.48B	11.22B	-13.10B
Financing Cash Flow	42.38B	1.10B	-10.55B	7.91B	-29.13B	-10.38B

Oracle Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 155.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORCL, the sentiment is Negative. The current price of 155.11 is above the 20-day moving average (MA) of 151.80, below the 50-day MA of 164.09, and below the 200-day MA of 219.45, indicating a neutral trend. The MACD of -1.77 indicates Negative momentum. The RSI at 46.48 is Neutral, neither overbought nor oversold. The STOCH value of 31.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ORCL.

Oracle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSFT	74 Outperform	$2.91T	23.36	33.61%	0.71%	16.67%	28.60%
PANW	74 Outperform	$137.83B	71.18	15.49%	―	15.30%	-60.71%
CRM	71 Outperform	$179.38B	25.54	12.37%	0.63%	8.41%	22.92%
SAP	69 Neutral	$210.92B	38.71	16.82%	1.07%	11.85%	167.23%
CRWD	69 Neutral	$110.53B	-686.05	-4.68%	―	22.05%	-341.24%
ORCL	63 Neutral	$439.75B	27.89	57.35%	1.00%	11.08%	29.56%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Oracle Corporate Events

Oracle Posts Strong Q3 Results on Surging AI Cloud

On March 10, 2026, Oracle reported an exceptionally strong third quarter for fiscal 2026, with total revenue rising 22% year over year to $17.2 billion and cloud revenue jumping 44% to $8.9 billion. GAAP earnings per share increased 24% to $1.27 and non-GAAP EPS climbed 21% to $1.79, marking the first quarter in over 15 years in which organic total revenue and non-GAAP EPS both grew at 20% or more in U.S. dollars.

Cloud infrastructure revenue surged 84% to $4.9 billion and multicloud database revenue grew 531%, driving Remaining Performance Obligations to $553 billion, up 325% and fueled largely by large-scale AI contracts that Oracle says are mostly funded by customer prepayments or customer-supplied GPUs. The company also completed $30 billion of its planned $50 billion financing via bonds and mandatory convertible preferred stock, while its board declared dividends on both common and mandatory convertible preferred shares, signaling confidence in its cash generation and reinforcing Oracle’s aggressive push to capture accelerating AI-driven cloud demand.

The most recent analyst rating on (ORCL) stock is a Buy with a $230.00 price target. To see the full list of analyst forecasts on Oracle stock, see the ORCL Stock Forecast page.

Oracle Issues Series D Mandatory Convertible Preferred Stock

On February 2, 2026, Oracle Corporation entered into an underwriting agreement with a syndicate of major investment banks to issue and sell 100 million depositary shares, each representing a 1/2,000th interest in a share of its 6.50% Series D Mandatory Convertible Preferred Stock, and the offering closed on February 5, 2026. In connection with this capital-raising transaction, Oracle established the terms of the new preferred stock via a certificate of designations filed in Delaware, setting a 6.50% annual dividend on a $100,000 liquidation preference and restricting dividends and share repurchases on common and other junior or parity stock unless preferred dividends are current, while providing that the preferred shares (and related depositary shares) will automatically convert into Oracle common stock by January 2029 within a set conversion range based on market prices, with defined rights in liquidation and proportional participation for holders of the depositary shares.

The most recent analyst rating on (ORCL) stock is a Buy with a $285.00 price target. To see the full list of analyst forecasts on Oracle stock, see the ORCL Stock Forecast page.

Oracle Bolsters Financing with Major Senior Notes Issuance

On February 2, 2026, Oracle entered into an equity distribution agreement with a syndicate of major investment banks to launch an at-the-market offering program allowing the company to sell up to $20 billion of its common stock from time to time, providing flexible access to equity capital while retaining the ability to suspend or terminate sales at its discretion. On February 4, 2026, Oracle completed the issuance of $25 billion in senior notes across multiple maturities and coupon structures, securing substantial long-term financing for general corporate purposes, including potential debt repayment, capital expenditures, acquisitions, and shareholder returns, in a move that significantly bolsters its funding capacity and financial flexibility.

The most recent analyst rating on (ORCL) stock is a Buy with a $205.00 price target. To see the full list of analyst forecasts on Oracle stock, see the ORCL Stock Forecast page.

Oracle announces orderly retirement of long-serving board members

On January 5, 2026, Oracle announced that George H. Conrades, 86, retired from its Board of Directors after 18 years of service, followed on January 7, 2026, by the retirement of Naomi O. Seligman, 87, after 20 years on the Board. The company stated that both long-serving directors stepped down effective immediately and that their departures were not due to any dispute or disagreement over Oracle’s operations, policies, or practices, signaling an orderly transition in board leadership rather than a response to internal conflict.

The most recent analyst rating on (ORCL) stock is a Hold with a $195.00 price target. To see the full list of analyst forecasts on Oracle stock, see the ORCL Stock Forecast page.