Oracle Corporation ORCL
Oracle's FY2026 results show genuine AI-driven momentum — revenue grew 17% to $67.4B and EPS jumped 34% to $5.83 — but the stock has already rallied ~28% from the prior verdict price to $156.31, compressing the valuation cushion that made it attractive at $122. The core problem remains unchanged: free cash flow collapsed to -$23.7B as capex exploded to $55.7B, funded by total debt that ballooned to $156.2B against just $42.5B of equity.
While the Quantinuum partnership and broader neocloud demand (CoreWeave's pipeline surging to $104B) validate the AI infrastructure thesis, Oracle's capex cycle is unproven and the FCF inflection investors are pricing in has not yet materialized. At 26.3x earnings — still a 55% discount to the peer median PE of 58.4x — the stock is no longer cheap enough to compensate for the balance sheet risk, keeping this a hold until capex peaks and FCF turns positive.
What could go wrong
- Capex escalation without FCF return. Capex surged from $6.9B (FY2024) to $55.7B (FY2026), driving FCF to -$23.7B. If capex continues to escalate or revenue growth fails to monetize the infrastructure build, the equity story breaks.
- Debt sustainability. Total debt reached $156.2B against $42.5B stockholders' equity, a 3.7x debt-to-equity ratio. Rising rates or credit spread widening could pressure servicing costs and limit financial flexibility.
- Competitive AI infrastructure threat. Nvidia's $500B investment plan with Apollo, BlackRock, and Blackstone to mobilize third-party capital for neoclouds could commoditize AI compute and undercut Oracle's OCI positioning.
- Valuation cushion eroded. Stock has rallied from ~$122 to $156, lifting PE from ~20x to 26.3x. Price sits below the 200-day MA of $176.79, and further upside without FCF proof risks a sharp correction.
What would change my mind
Where this comes from: FMP fundamentals FY2026/FY2025 · FMP fundamentals FY2026/FY2025 · FMP fundamentals FY2026 · FMP fundamentals FY2026. Orin's read on ORCL; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All ORCL filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $16.4B | 0.3% of fund |
| State Street | $11.5B | 0.3% of fund |
| Vanguard Portfolio Management | $8.4B | 0.4% of fund |
| Capital Research Global Investors | $5.8B | 0.8% of fund |
| Geode Capital Management | $5.7B | 0.3% of fund |
| Morgan Stanley | $4.5B | 0.2% of fund |
179 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 264 Form 4 filings, net $13.4M. Of the 50 on hand, 0 were open-market purchases and 12 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about ORCL
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 22.3× | 30.7× | 53.3× |
| EV/EBITDA | 14.2× | 19.0× | — |
| P/S | 5.80× | 5.79× | — |
| P/B | 6.4× | — | — |
Its P/E sits 20th percentile of its own last 5 years (−1.05σ from its own mean).
What Wall Street published
$237
$95 – $325 · +64% against today's price
- 57 buy or overweight
- 26 hold
- 4 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| ORCLOracle Corporation | $416B | 22.3× | 14.2× | 63.9% | 26.4% | 43% |
| ADBEAdobe Inc. | $96B | 13.4× | 9.6× | 89.1% | 28.0% | 63% |
| ASMLASML Holding N.V. | $672B | 55.0× | 42.0× | 52.7% | 30.1% | 52% |
| FTNTFortinet, Inc. | $131B | 62.5× | 44.5× | 80.4% | 28.2% | 188% |
| PLTRPalantir Technologies Inc. | $440B | 152.2× | 141.5× | 84.8% | 49.0% | 37% |
| SNPSSynopsys, Inc. | $79B | 71.7× | 24.4× | 72.4% | 11.4% | 4% |
The median is of the 5 peers listed above and nothing else — check it against the column. This company trades 64.3% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $40 | $203.33 · −80% | 2026-06-10 |
| Levered DCF | $31 | $203.33 · −85% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.