Oracle (ORCL) AI Stock Analysis

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Oracle

(NYSE:ORCL)

Rating:71Outperform

Price Target:

$363.00

▲(17.91% Upside)

Oracle's strong earnings call, highlighting growth in cloud services and strategic positioning in AI, is the most significant factor driving the score. Financial performance shows strong profitability but is offset by high leverage and negative free cash flow. Technical analysis indicates bullish momentum but suggests caution due to overbought signals. Valuation is a concern with a high P/E ratio and low dividend yield.

Positive Factors

Cloud Revenue Growth

Oracle's strong cloud revenue growth underscores its competitive position in the cloud market, driven by increasing demand for cloud infrastructure and services.

AI and Multi-Cloud Expansion

The surge in multi-cloud database revenue highlights Oracle's strategic expansion and leadership in AI workloads, enhancing its long-term market positioning.

Remaining Performance Obligations

The significant increase in RPO indicates strong future revenue potential, reflecting robust demand for Oracle's cloud services and long-term growth prospects.

Negative Factors

High Leverage

Oracle's high leverage poses a risk to financial stability, potentially limiting its ability to invest in growth opportunities and manage economic downturns.

Negative Free Cash Flow

Negative free cash flow, despite strong operating cash flow, indicates challenges in managing capital expenditures, which could impact long-term financial health.

Slight Decline in Software Revenue

A decline in software revenue suggests potential challenges in Oracle's traditional business segments, which may affect overall revenue diversification.

Oracle (ORCL) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$669.85B

Dividend Yield0.58%

Average Volume (3M)11.86M

Price to Earnings (P/E)54.9

Beta (1Y)1.41

Revenue Growth9.67%

EPS Growth11.23%

CountryUS

Employees159,000

SectorTechnology

Sector Strength86

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)1.47

Shares Outstanding2,808,833,000

10 Day Avg. Volume14,778,205

30 Day Avg. Volume11,861,397

Financial Highlights & Ratios

PEG Ratio2.17

Price to Book (P/B)22.57

Price to Sales (P/S)8.04

P/FCF Ratio-1.17K

Enterprise Value/Market Cap1.12

Enterprise Value/Revenue12.75

Enterprise Value/Gross Profit16.50

Enterprise Value/Ebitda32.47

Forecast

1Y Price Target

$332.93

Price Target Upside8.14% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering33

Oracle Business Overview & Revenue Model

Company DescriptionOracle Corporation (ORCL) is a multinational computer technology corporation that specializes in developing and marketing database software and technology, cloud-engineered systems, and enterprise software products. The company operates in multiple sectors, including cloud applications, cloud infrastructure, and hardware systems. Oracle’s core products include its flagship Oracle Database, Oracle Cloud Infrastructure, and a suite of cloud applications for enterprise resource planning (ERP), customer relationship management (CRM), and human capital management (HCM).

How the Company Makes MoneyOracle generates revenue primarily through a combination of software licensing, cloud services, and hardware systems. Its key revenue streams include subscription-based cloud services, which have seen significant growth as businesses migrate to cloud solutions, and software licensing fees for its on-premises database and applications. Additionally, Oracle earns revenue from services such as consulting, support, and training associated with its products. The company has formed strategic partnerships with other technology firms, enhancing its cloud offerings and expanding its market reach, which also contributes to its earnings. Oracle's focus on innovation and investment in research and development further drives its competitive advantage in the technology sector.

Oracle Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue from different business units, indicating Oracle's strengths and potential areas for growth or concern based on market demand and competition.

Chart InsightsOracle's Cloud Services and License Support segment continues its strong upward trajectory, reflecting the company's strategic focus on cloud and AI markets. Despite a slight decline in software revenue, the earnings call highlights robust growth in cloud infrastructure and multi-cloud database services, positioning Oracle as a leader in AI workloads. The substantial increase in remaining performance obligations underscores future revenue potential, although challenges like negative free cash flow persist. Oracle's ambitious revenue projections and significant CapEx investments signal confidence in sustaining this growth momentum.

Data provided by:

Main Street Data

Oracle Earnings Call Summary

Earnings Call Date:Sep 09, 2025

(Q1-2026)

% Change Since: |

Next Earnings Date:Dec 15, 2025

Earnings Call Sentiment Positive

The earnings call presented a highly positive outlook for Oracle, with significant growth in cloud services, particularly in AI workloads and multi-cloud databases. The substantial increase in RPO and ambitious future revenue projections highlight strong market positioning. However, challenges remain with negative free cash flow and a slight decline in software revenue.

Q1-2026 Updates

Positive Updates

Record Cloud Revenue Growth

Total cloud revenue increased by 27% to $7.2 billion, with cloud infrastructure revenue up 54% to $3.3 billion and cloud database services up 32% with annualized revenues nearing $2.8 billion.

Significant Increase in Remaining Performance Obligations (RPO)

RPO reached $455 billion, marking a 359% increase from last year, and a $317 billion increase from Q4, driven by demand for Oracle Cloud infrastructure.

Strong AI Workload Adoption

Oracle has signed cloud contracts with major players like OpenAI, xAI, Meta, NVIDIA, and AMD, positioning itself as a leader in AI workloads.

Multi-Cloud Database Revenue Surge

Multi-cloud database revenue grew by 1529% in Q1, with Oracle regions being embedded in AWS, Azure, and GCP.

Ambitious Future Revenue Projections

Oracle expects Oracle Cloud Infrastructure to grow 77% to $18 billion in the current fiscal year, with projections reaching $144 billion over the next four years.

Adoption of AI in Internal Operations

Oracle is adopting AI internally to increase efficiency, with an expectation of mid-teens growth in operating income this year.

Negative Updates

Free Cash Flow Challenges

Free cash flow was negative at $362 million for Q1, with capital expenditures of $8.5 billion.

Slight Decline in Software Revenue

Total software revenue for the quarter was $5.7 billion, marking a 2% decrease.

Company Guidance

During Oracle Corporation's Q1 FY2026 earnings call, several key metrics were highlighted that underscore the company's robust growth and strategic positioning in the AI and cloud markets. Oracle reported a total cloud revenue increase of 27%, reaching $7.2 billion, with cloud infrastructure revenue growing by 54% to $3.3 billion. The company's remaining performance obligations (RPO) surged to $455 billion, up 359% from the previous year and $317 billion from Q4, indicating substantial future revenue potential. Additionally, Oracle's multi-cloud database revenue saw a remarkable growth of 1529% in Q1. The guidance for FY2026 anticipates a 16% total revenue growth in constant currency, with Oracle Cloud Infrastructure projected to grow 77% to $18 billion and further expand to $144 billion over the next four years. Oracle also reported a non-GAAP EPS of $1.47 and a GAAP EPS of $1.01 for the quarter, with a non-GAAP tax rate slightly higher than expected, impacting EPS by $0.03. The company outlined a CapEx plan of approximately $35 billion for FY2026 to support the anticipated growth.

Oracle Financial Statement Overview

Summary

Oracle demonstrates strong profitability with high margins and return on equity. However, high debt levels and negative free cash flow present potential risks, necessitating careful management of leverage and cash flow for sustained financial health.

Income Statement

Very Positive

Oracle's income statement shows strong profitability with a high gross profit margin of 77.23% and a solid net profit margin of 21.08% for TTM (Trailing-Twelve-Months). Revenue growth is moderate at 2.82% TTM, indicating steady expansion. EBIT and EBITDA margins are robust at 30.50% and 39.26% respectively, reflecting efficient operations. Overall, Oracle demonstrates strong profitability and stable growth, though revenue growth could be more aggressive.

Balance Sheet

Positive

The balance sheet reveals a high debt-to-equity ratio of 4.36 TTM, indicating significant leverage, which could pose a risk if not managed carefully. However, the return on equity is impressive at 66.28%, showcasing effective use of equity to generate profits. The equity ratio is relatively low, suggesting a reliance on debt financing. While profitability is strong, the high leverage warrants caution.

Cash Flow

Neutral

Oracle's cash flow statement shows a concerning negative free cash flow of -$5.88 billion TTM, despite a significant growth rate of 1392.39%. The operating cash flow to net income ratio is moderate at 0.54, indicating decent cash generation relative to net income. However, the negative free cash flow to net income ratio of -0.27 highlights potential liquidity issues. While operating cash flow is strong, the negative free cash flow is a critical area to address.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	59.02B	57.40B	52.96B	49.95B	42.44B	40.48B
Gross Profit	45.58B	40.47B	37.82B	36.39B	33.56B	32.62B
EBITDA	23.17B	23.91B	21.39B	18.74B	13.53B	18.41B
Net Income	12.44B	12.44B	10.47B	8.50B	6.72B	13.75B
Balance Sheet
Total Assets	180.45B	168.36B	140.98B	134.38B	109.30B	131.11B
Cash, Cash Equivalents and Short-Term Investments	11.01B	11.20B	10.66B	10.19B	21.90B	46.55B
Total Debt	105.41B	104.10B	94.47B	90.48B	75.86B	84.25B
Total Liabilities	155.78B	147.39B	131.74B	132.83B	115.06B	125.16B
Stockholders Equity	24.15B	20.45B	8.70B	1.07B	-6.22B	5.24B
Cash Flow
Free Cash Flow	-5.88B	-394.00M	11.81B	8.47B	5.03B	13.75B
Operating Cash Flow	21.53B	20.82B	18.67B	17.16B	9.54B	15.89B
Investing Cash Flow	-27.66B	-21.71B	-7.36B	-36.48B	11.22B	-13.10B
Financing Cash Flow	5.89B	1.10B	-10.55B	7.91B	-29.13B	-10.38B

Oracle Technical Analysis

Technical Analysis Sentiment

Positive

Last Price307.86

Price Trends

50DMA

243.59

Positive

100DMA

206.55

Positive

200DMA

184.36

Positive

Market Momentum

MACD

10.14

Negative

RSI

71.73

Negative

STOCH

82.82

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORCL, the sentiment is Positive. The current price of 307.86 is above the 20-day moving average (MA) of 243.71, above the 50-day MA of 243.59, and above the 200-day MA of 184.36, indicating a bullish trend. The MACD of 10.14 indicates Negative momentum. The RSI at 71.73 is Negative, neither overbought nor oversold. The STOCH value of 82.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ORCL.

Oracle Risk Analysis

Oracle disclosed 31 risk factors in its most recent earnings report. Oracle reported the most risks in the "Tech & Innovation" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Oracle Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADBE	82 Outperform	$148.54B	22.39	52.25%	―	10.69%	40.10%
PANW	80 Outperform	$131.99B	123.32	17.45%	―	14.87%	-57.43%
MSFT	74 Outperform	$3.72T	36.68	33.28%	0.66%	14.93%	15.50%
ORCL	71 Outperform	$669.85B	54.93	71.15%	0.58%	9.67%	11.23%
PLTR	71 Outperform	$395.56B	554.14	15.30%	―	38.79%	78.37%
SNPS	69 Neutral	$72.03B	30.36	6.61%	―	3.21%	31.64%
Sector *	61 Neutral	$36.70B	12.21	-10.39%	1.84%	8.50%	-7.32%

* Technology Sector Average

Performance Comparison

ORCL

Oracle

307.86

148.15

92.76%

ADBE

Adobe

350.55

-236.00

-40.24%

MSFT

Microsoft

501.01

77.19

18.21%

PANW

Palo Alto Networks

198.33

25.75

14.92%

SNPS

Synopsys

438.10

-50.85

-10.40%

PLTR

Palantir Technologies

164.36

129.45

370.81%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 11, 2025