Oracle (ORCL) AI Stock Analysis

• Market Cap: $420.02B
• Dividend Yield: 1%
• Average Volume (3M): 27.06M
• Price to Earnings (P/E): 27.5
• Beta (1Y): 1.52
• Revenue Growth: 11.08%
• EPS Growth: 29.56%
• Country: US
• Employees: 159,000
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 2.26
• Shares Outstanding: 2,874,091,000
• 10 Day Avg. Volume: 19,851,770
• 30 Day Avg. Volume: 27,057,763
• 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: 1.25
• Enterprise Value/Revenue: 8.57
• Enterprise Value/Gross Profit: 12.51
• Enterprise Value/Ebitda: 19.37
• 1Y Price Target: $281.93
• Price Target Upside: 87.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 31
• EPS Forecast (FY): 7.38
• Revenue Forecast (FY): $66.94B

• Rating: 65 Neutral
• Price Target: $166.00 ▲(10.44% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score reflects strong earnings-call outlook and solid profitability, tempered by high leverage and negative free cash flow, with bearish technical signals (below major moving averages and negative MACD) further weighing on the near-term profile. Valuation is not cheap at ~30x earnings, and the dividend yield offers only modest support.

Positive Factors

Cloud & OCI Growth

Oracle's cloud mix growth and rapid OCI expansion reflect durable shifts from on-prem to subscription cloud and AI infrastructure. Higher cloud scale and GPU demand create recurring, sticky revenue, improve lifetime customer value, and position Oracle competitively for enterprise AI workloads over the next several years.

Very Large RPO Backlog

A $523B RPO provides multi-year revenue visibility and contractually backed demand, reducing near-term volatility. Large booked obligations tied to major customers support predictable recognition, better planning for capacity and cash flow, and cement long-term customer relationships across cloud and AI services.

High Profitability & ROE

Sustained high gross and net margins and very strong ROE indicate durable operating leverage from software and cloud subscriptions. This margin profile funds product development and sales while supporting profitability as scale grows, giving Oracle a structural advantage over lower-margin infrastructure peers.

Negative Factors

High Leverage

A debt-to-equity around 4.36 materially raises financial risk: greater interest expense sensitivity to rate moves, constrained flexibility for opportunistic investments or buybacks, and higher refinancing risk. Elevated leverage makes sustained investment cycles and margin volatility more hazardous long term.

Negative Free Cash Flow / Heavy CapEx

Material negative FCF driven by $12B CapEx for data centers means operations don't fully self-fund growth. Persistent capex intensity forces reliance on external financing or slower returns to shareholders, reducing resilience if growth or margin assumptions falter over the medium term.

Reliance on External Financing

Large equity distribution and $25B note issuance structurally change Oracle's capital mix: they increase debt service obligations and create potential dilution. This reliance on market funding signals limited internal cash coverage for capex, raising long-run financing cost and governance pressure on capital allocation.

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 generates revenue through several key streams. The primary source is its cloud services and license support, which includes subscriptions to its cloud applications and database services. This segment has seen significant growth as businesses increasingly migrate to cloud-based solutions. Additionally, Oracle earns revenue from software licenses and hardware systems, where it sells its on-premises software and engineered systems. Maintenance and support services also contribute to its earnings, providing ongoing support to customers who purchase its software products. Strategic partnerships, such as collaborations with major cloud providers and technology firms, enhance its market reach and drive revenue growth. The company also benefits from its extensive customer base, which includes large enterprises and government entities, leading to recurring revenue through long-term contracts.

Oracle Financial Statement Overview

Summary

Profitability is strong (gross margin above ~69% and net margin over 21% TTM) with steady revenue growth, but the balance sheet is highly leveraged (debt-to-equity ~4.36) and TTM free cash flow is negative, raising funding and flexibility risk.

Income Statement

Oracle's income statement shows strong profitability with a consistent gross profit margin above 69% and a net profit margin over 21% in the TTM. Revenue growth is steady at 3.39% in the TTM, indicating a healthy expansion. EBIT and EBITDA margins are robust, reflecting efficient operations and cost management. However, the slight decline in gross profit margin over time suggests potential cost pressures.

Balance Sheet

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

Cash Flow

Oracle's cash flow statement shows a mixed picture. Operating cash flow is strong, but free cash flow is negative in the TTM, indicating potential challenges in covering capital expenditures. The free cash flow to net income ratio is negative, highlighting cash flow issues despite profitability. However, the operating cash flow to net income ratio is reasonable, suggesting operational efficiency.

Breakdown	TTM	May 2025	May 2024	May 2023	May 2022	May 2021
Income Statement
Total Revenue	61.02B	57.40B	52.96B	49.95B	42.44B	40.48B
Gross Profit	41.82B	40.47B	37.82B	36.39B	33.56B	32.62B
EBITDA	27.00B	23.91B	21.39B	18.74B	13.53B	18.41B
Net Income	15.43B	12.44B	10.47B	8.50B	6.72B	13.75B
Balance Sheet
Total Assets	204.98B	168.36B	140.98B	134.38B	109.30B	131.11B
Cash, Cash Equivalents and Short-Term Investments	19.77B	11.20B	10.66B	10.19B	21.90B	46.55B
Total Debt	124.39B	104.10B	94.47B	90.48B	75.86B	84.25B
Total Liabilities	174.53B	147.39B	131.74B	132.83B	115.06B	125.16B
Stockholders Equity	29.95B	20.45B	8.70B	1.07B	-6.22B	5.24B
Cash Flow
Free Cash Flow	-13.18B	-394.00M	11.81B	8.47B	5.03B	13.75B
Operating Cash Flow	22.30B	20.82B	18.67B	17.16B	9.54B	15.89B
Investing Cash Flow	-31.59B	-21.71B	-7.36B	-36.48B	11.22B	-13.10B
Financing Cash Flow	17.44B	1.10B	-10.55B	7.91B	-29.13B	-10.38B

Oracle Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 150.31
• 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 150.31 is below the 20-day moving average (MA) of 153.25, below the 50-day MA of 174.82, and below the 200-day MA of 219.89, indicating a bearish trend. The MACD of -8.22 indicates Negative momentum. The RSI at 41.44 is Neutral, neither overbought nor oversold. The STOCH value of 39.60 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	$2.89T	24.34	34.39%	0.71%	16.67%	28.60%
PANW	72 Outperform	$115.60B	80.15	16.26%	―	15.30%	-60.71%
CRM	71 Outperform	$173.74B	24.74	12.18%	0.63%	8.41%	22.92%
SAP	69 Neutral	$223.33B	27.70	16.64%	1.07%	11.85%	167.23%
ORCL	65 Neutral	$420.02B	27.46	70.60%	1.00%	11.08%	29.56%
CRWD	62 Neutral	$88.30B	-287.57	-8.88%	―	22.05%	-341.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Oracle Corporate Events

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.

Oracle Reports Strong Q2 2026 Financial Results

Oracle announced its fiscal 2026 Q2 financial results, reporting a significant increase in remaining performance obligations to $523 billion, up 438% year-over-year. The company’s total quarterly revenues rose by 14% in USD to $16.1 billion, driven by a 34% increase in cloud revenues. Oracle’s strategic shift towards chip neutrality and its focus on embedding AI across its software products are expected to enhance its market position, with its Multicloud database business experiencing rapid growth.

The most recent analyst rating on (ORCL) stock is a Hold with a $270.00 price target. To see the full list of analyst forecasts on Oracle stock, see the ORCL Stock Forecast page.

Oracle Expands Board with Stephen Rusckowski Appointment

On November 18, 2025, Oracle Corporation’s Board of Directors elected Stephen Rusckowski as a director, expanding the board to 14 members. Rusckowski, with a rich background in healthcare and technology, is expected to provide valuable insights into Oracle Health’s operations. Additionally, Oracle held its 2025 Annual Meeting of Stockholders where directors were elected, executive compensation was approved, and Ernst & Young LLP was ratified as the independent accounting firm for the fiscal year ending May 31, 2026.

The most recent analyst rating on (ORCL) stock is a Hold with a $261.00 price target. To see the full list of analyst forecasts on Oracle stock, see the ORCL Stock Forecast page.