committed $1 billion over four years to strengthen its partner network, with shares trading at $125.95, up 0.33%, at 10:35 a.m. ET on Friday. The money will support training, technical resources, cloud migrations and sales efforts. The business logic is straightforward: help more partners get customers onto Oracle's platforms and keep them spending.
There is plenty of demand to serve. Oracle's fiscal first-quarter results showed revenue rising 30% to $19.3 billion, with cloud infrastructure revenue jumping 121% to $7.4 billion. Total cloud revenue reached $11.6 billion, up 62%, while remaining performance obligations stood at $664 billion. The challenge is execution: signed commitments still need to become delivered services and recognized revenue.
The financial profile shows that tension: Oracle's GF Score of 88/100 pairs strong growth and profitability readings with weaker financial strength and valuation readings. Partner support could expand implementation capacity without Oracle handling every deployment itself. But spending is the starting line. Investors should watch whether the incentives bring additional cloud usage, faster migrations and better conversion of contracted business into revenue.
Oracle (NYSE: ORCL) stock’s 49.59% price collapse from the early June highs near $250 to $125.09 at press time has, so far, failed to decisively sour the mood of Wall Street analysts, with the most recent note featuring a ‘Buy’ rating.
Oracle stock price YTD chart with performance since early June highlighted. Source: Google
Specifically, Goldman Sachs’ (NYSE: GS) Gabriela Borges issued a note on Friday, October 23, in which she gave ORCL shares a positive recommendation. Still, the steep decline left a mark as the Wall Street expert, despite staying bullish, decreased the 12-month Oracle stock price from $240 – a 91.86% upside – to $206 – a 63.88% predicted rally.
Reflecting on the change, Borges explained that, while artificial intelligence (AI) infrastructure projects and investments have been under heightened scrutiny, the technology giant’s strong remaining performance obligation (RPO) growth and heightened revenue targets for fiscal year 2027 (FY2027) provide support for the optimistic outlook.
Analysts predict Oracle stock price amidst 49% four-month crash Zooming out reveals that the market turmoil and adverse business developments regarding Oracle in particular and the AI sector as a whole left little impression on institutional experts.
Overall, ORCL stock is viewed as a ‘Strong Buy’ on Wall Street, with twenty-seven positive, four ‘Hold’, and a single ‘Sell’ recommendation issued within the last three months, per the data Finbold retrieved from TipRanks on October 23.
Similarly, the average Oracle shares price target for the next 12 months is rather high and estimates the equity will rally 96.01% to $244.89 within the timeframe.
Wall Street sets Oracle stock price target for the next 12 months. Source: TipRanks Finally, notes issued in October proved almost universally bullish, with four out of the six revisions featuring a ‘Buy’ rating. The two outliers came in the form of RBC Capital and Yorkville Ives & Co, with both providing a ‘Hold’ recommendation but a $165 and $155 price forecast, respectively.
The optimistic standout was Cantor Fitzgerald analyst Thomas Blakey, who estimated that Oracle stock can soar 127.04% to $284 in the next 12 months.
Featured image via Shutterstock
Best Crypto Exchange for Intermediate Traders and Investors
Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.
0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
Copy top-performing traders in real time, automatically.
eToro USA is registered with FINRA for securities trading.
30+ million Users worldwide
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD
Join Finbold's newsroom, become a Sales Executive today! Apply now to join Finbold as a crypto/finance news writer!
Key Takeaways Oracle's $664 billion RPO and raised fiscal 2027 revenue outlook strengthen its multi-year growth visibility.ORCL's prepayments, 97.9% GPU utilization and expanding multicloud database business support its AI strategy.Alibaba's 45% cloud growth faces heavy capex, shrinking operating income and a premium valuation. Oracle (ORCL - Free Report) and Alibaba Group (BABA - Free Report) have each repositioned as artificial intelligence (AI) infrastructure providers, pairing massive data center buildouts with proprietary software. Oracle leverages Oracle Cloud Infrastructure (“OCI”), its database franchise and Fusion applications, while Alibaba combines Alibaba Cloud, its Qwen model family and in-house T-Head chips under one full-stack strategy.
Both companies are spending aggressively on capital expenditure (capex) to meet AI compute demand that outstrips supply, making funding discipline and monetization pace critical differentiators now.
Let's delve deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.
The Case for ORCL StockOracle's biggest strength is contracted visibility. Remaining performance obligations (RPO) reached $664 billion at the end of first-quarter fiscal 2027, and management expects roughly half to convert into revenue over the next 36 months. Oracle booked more than $30 billion of new AI cloud contracts, mostly structured through customer prepayments or bring-your-own-hardware arrangements that require no incremental cash from Oracle, easing funding concerns and supporting a self-funding growth model.
Fleet economics remain highly encouraging for long-term profitability. GPU utilization stood at 97.9%, and capacity up for renewal was re-contracted at a 20% premium. Multicloud database revenues grew 353% as Oracle completed its planned Azure and AWS regional expansion, reaching 70 multicloud database regions. The applications portfolio adds diversification, with Fusion growing 14% and AI agents increasingly embedded across customer workflows, deepening customer stickiness.
Recent announcements strengthen the AI software layer. In October 2026, Oracle added xAI's Grok 4.6 and 4.7 models and a Smart Model Router to OCI Enterprise AI. On Oct. 21, it unveiled AI Agent Studio for Industry Applications, a no-code and low-code environment for building industry-specific AI agents.
For fiscal 2027, Oracle raised its revenue outlook to at least $90 billion, implying 34% growth, and expects non-GAAP EPS of $8.10. For the second quarter, it guides total revenue growth of 30-34% and cloud revenue growth of 65-71%. Challenges include a fiscal 2027 capex projection of $90-$95 billion, negative free cash flow, a completed $20 billion equity issuance and air-permitting and power-delivery hurdles at certain data center sites.
The Zacks Consensus Estimate for ORCL’s fiscal 2027 earnings is currently pegged at $8.13 per share. The estimate implies 6.55% year-over-year earnings growth.
The Case for BABA StockAlibaba's cloud momentum is clearly notable. External revenue growth at Alibaba Cloud accelerated to 45% in the June quarter, a 22-quarter high, while AI-related product revenues posted triple-digit growth for the 12th straight quarter and now accounts for 35% of external cloud revenues. Management expects AI and cloud growth to accelerate further as new capacity comes online, with annualized AI-related revenues approaching $10 billion.
The full-stack strategy remains a key competitive differentiator for the company. At the Apsara Conference on Sept. 22, 2026, Alibaba disclosed that Qwen 4 is in training, with the Qwen 4.5 and Qwen 5 series projected to scale to 5-10 trillion parameters. T-Head unveiled the Zhenwu V900 accelerator, offering three times its predecessor's performance and slated for mass production in the first quarter of 2027. Alibaba also targets more than 20GW of global data center capacity by 2032 and plans new cloud regions in Türkiye, Finland and the Netherlands.
However, the investment burden is substantial. Alibaba has spent RMB190 billion of its RMB380 billion three-year capital investment plan, and June-quarter capex jumped 75% year over year to RMB67.7 billion, driving a sizable free cash outflow in the quarter. Management expects AI-related capex to break even within three years, potentially sooner through proprietary chips and higher-margin products, but those returns are yet to materialize at scale. Meanwhile, customer management revenues declined 7%, and heavier technology investment compressed operating income by 57%, keeping near-term profitability under pressure, while its sizable commerce operations must continue funding the AI buildout.
The Zacks Consensus Estimate for fiscal 2027 EPS is pegged at $6.37, reflecting a 2.7% downward revision over the past 30 days.
Valuation and Price Performance ComparisonOracle trades at a trailing 12-month price-to-earnings (P/E) ratio of 18.46X, well below Alibaba's 44.66X. Oracle's discount appears justified given heavy capex and negative free cash flow, but investors should track the stock as the $664 billion backlog offers earnings visibility that the lower multiple does not reflect. Alibaba's premium already prices in a cloud acceleration, so investors should hold or wait patiently.
ORCL vs. BABA: P/E TTM Ratio
Image Source: Zacks Investment Research
Oracle shares have plunged 35.6% year to date, while Alibaba shares have lost 30.5%. Oracle's steeper drop still merits tracking since raised fiscal 2027 guidance signals that underlying fundamentals remain firmly intact despite share weakness.
ORCL underperforms BABA Year-to-date
Image Source: Zacks Investment Research
ConclusionOracle holds the edge over Alibaba on multiple fronts. Its $664 billion RPO provides multi-year revenue visibility, prepayment and bring-your-own-hardware structures ease funding pressure, and raised fiscal 2027 guidance reinforces execution strength. Multicloud database expansion, embedded AI agents and new agent-building tools diversify growth beyond infrastructure. Alibaba offers strong cloud acceleration and an ambitious full-stack roadmap, but heavy capex, compressed profitability, uncertain payback timing and a premium valuation temper its appeal. With a discounted valuation backed by contracted demand, Oracle offers better upside potential. Investors should track and hold ORCL stock and wait for a better entry point for BABA. Oracle and Alibaba carry a Zacks Rank #3 (Hold) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TikTok's U.S. entity is looking to secure multiple gigawatts of computing capacity, sources told CNBC, amid a global scramble for digital infrastructure deals.
The company, officially TikTok USDS Joint Venture, operates the social media platform in the U.S. and has sounded out opportunities to obtain capacity over the coming years, two people familiar with the discussions, who asked to remain anonymous as they weren't authorized to share the information, told CNBC.
TikTok U.S. is looking for four gigawatts of compute power by the early 2030s, one source said.
Companies across the world are looking to secure more compute capacity as artificial intelligence workloads become more prominent.
A company spokesperson told CNBC that the company "runs primarily on Oracle Cloud Infrastructure in the U.S. and Oracle will continue to be our primary cloud infrastructure provider."
Oracle Cloud Infrastructure, or OCI, typically runs in facilities that Oracle leases. CNBC has approached Oracle for comment.
There are signs TikTok U.S.' product plans could require extra compute going forward.
The company has numerous machine learning roles live on its website. A job advert posted by TikTok states that the company is "shipping a flagship B2B AI product at the frontier of large-model inference and creative automation."
TikTok U.S. localizes algorithm trainingTikTok USDS Joint Venture was established in 2026 in compliance with U.S. President Donald Trump's executive order mandating the divestiture of TikTok in the U.S. from its Chinese parent company, ByteDance.
In January, TikTok U.S. said it would "retrain, test, and update" its prized recommendation algorithm, which is built on machine learning, on U.S. user data. The company's recommendation algorithm will be "secured in Oracle's U.S. cloud environment," it said.
TikTok U.S. has three managing investors, Silver Lake, Oracle and MGX, each holding 15%. The Dell Family Office, the investment firm of Michael Dell, is also an investor. ByteDance retained 19.9% of the new entity.
Expanded access to cloud commitments, collaboration with Oracle sellers, and new purchasing options help partners turn enterprise demand into revenue
, /PRNewswire/ -- Oracle AI World -- Oracle today announced enhancements to Oracle Marketplace designed to help software and services partners, especially independent software vendors (ISVs), grow their businesses with Oracle customers and simplify purchasing. Expanded use of Oracle Universal Credits (UCs), new co-sell capabilities, and additional purchasing options help partners reach customers and sell through established budgets and buying processes. These enhancements help partners reach more customers and grow revenue with industry-specific software and AI solutions that complement Oracle's applications, databases, and cloud infrastructure.
As partners turn industry expertise into repeatable applications, accelerators, and AI offerings, Oracle PartnerNetwork provides integration validation benefits to help eligible ISVs demonstrate how their solutions work with Oracle technology. Oracle Marketplace gives those partners a route to commercialize eligible solutions and reach customers. These enhancements complement Oracle's $1 billion partner ecosystem commitment, connecting resources for partner development and delivery with opportunities to sell. See related announcement.
"Oracle customers rely on our technology to run their businesses, creating opportunities for ISVs to deliver complementary solutions," said Mark Hura, president, Global Field Operations, Oracle. "These Marketplace enhancements help partners reach those customers, collaborate with Oracle sellers, and simplify purchasing, helping ISVs grow while giving customers more choice and flexibility in how they buy."
"The next phase of cloud marketplace evolution is about more than transactions," said Stuart Wilson, Worldwide VP, Partnering Ecosystems, Alliances & Channels at IDC. "Partners increasingly want access to customers, seller collaboration, flexible commercial models, and the ability to align with enterprise procurement preferences. As marketplaces become a more integrated part of enterprise buying journeys, investments that strengthen these capabilities can help drive ecosystem growth and customer adoption."
The enhancements deliver five key benefits for partners and customers:
Closer collaboration with Oracle sellers: Marketplace Private Offers Co-Sell connects eligible ISVs with Oracle sellers on qualified customer opportunities. Oracle sellers can also proactively position ISV solutions to address specific customer needs, including specialized industry requirements. This collaborative approach supports solution positioning, customer introductions, and Private Offer execution. Greater flexibility to use existing cloud budgets: Oracle has increased the portion of a customer's eligible Universal Credits commitment that can be applied to qualifying Marketplace purchases. This allows customer to more easily direct existing cloud budget to partner solutions, creating additional sales opportunities for ISVs. Universal Credit top-ups also give eligible customers another way to replenish their credit balance for qualifying purchases. More ways to buy: Marketplace Private Offers let eligible ISVs negotiate pricing, terms, and contract durations directly with customers. Metered billing for eligible paid listings supports usage-based pricing, allowing customers to align spending with consumption. Multi-Party Private Offers enable ISVs, authorized resellers, and US customers to collaborate on a single customized transaction. ISVs can extend their reach through reseller networks, while customers buy through their preferred participating reseller. Broader access to AI and industry solutions: A growing ecosystem of Oracle Marketplace partners further enhance customer choice in AI solutions through established Oracle procurement and billing processes, with eligible UCs available for qualifying purchases. See recent Marketplace examples highlighted on Oracle.com:- Put your Oracle Cloud commitment to work with OpenAI models
- Accelerate software development with Meta Model API and Muse Code through Oracle Marketplace
- Accelerate AI Inference with NVIDIA NIM on OCI Marketplace
Oracle is also expanding its industry aligned strategy to Marketplace including health, retail, and hospitality, helping partners bring specialized solutions to customers. Additionally, Fusion Applications AI Agents give Oracle Fusion Cloud Applications customers access to Oracle-validated, partner-built AI agent templates that extend existing business workflows.
Expanded market reach: Oracle is expanding Marketplace purchasing to India and Japan, giving eligible partners more opportunities to reach customers. Oracle is also now offering Multi-Party Private Offers in the United States, Spain, and Brazil, with availability in additional European Union countries planned by the end of 2026. Turning customer opportunities into business
Partners including Fortinet, Pipefy, and RackWare have highlighted how Marketplace Private Offers support customer purchases through tailored commercial terms, simplified procurement, and the use Oracle of the use of eligible Oracle cloud commitments.
"Expanding Fortinet's presence in Oracle Marketplace gives customers a simpler way to purchase and deploy Fortinet security solutions through the procurement processes they already use with Oracle," said Anthony James, executive vice president of marketing, Fortinet.
"Oracle Marketplace opens the door to building joint solutions, rather than just executing joint transactions," said Andre Agra, CFO and EVP of strategic alliances, Pipefy.
"Enterprise customers want flexible ways to purchase and deploy solutions that support their business needs," said Colby Calonica, VP Global Sales, RackWare. "Oracle Marketplace Private Offers give us a way to work with customers on tailored commercial terms while helping them make use of eligible Oracle cloud commitments. This helps simplify the purchasing process and creates more opportunities for us to bring our solutions to Oracle customers."
About Oracle Marketplace
Oracle Marketplace connects customers with partner applications, services, and AI capabilities that complement Oracle technology. It gives eligible partners a route to Oracle customers and supports flexible purchasing through listings and private offers, helping customers procure solutions through established Oracle processes. ISVs can explore listing and selling requirements and get started at https://marketplace.oracle.com/partnerHome.
About Oracle PartnerNetwork
Oracle PartnerNetwork helps Oracle and its partners drive joint customer success and business momentum. Oracle's partner program provides choice and flexibility, offering benefits across training and enablement, go-to-market collaboration, technical accelerators, and success support. To learn more, visit https://www.oracle.com/partner/.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at oracle.com.
About Oracle AI World
Oracle AI World is where customers and partners discover the latest product and technology innovations, see how AI is being applied across industries, and connect with experts and peers. Attendees will gain practical tips and insights to drive immediate impact within their organizations and explore how Oracle is helping unlock the full potential of AI. Join the event to see new capabilities in action and hear from thought leaders and industry movers. Register now at oracle.com/ai-world or follow the news and conversation at oracle.com/news and linkedin.com/company/oracle.
Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.
Expanded benefits and incentives provide resources to build offerings, pursue new business, and deliver customer success
, /PRNewswire/ -- Oracle AI World -- Oracle today announced a $1 billion commitment to its partner ecosystem to help partners capitalize on customer demand for AI-powered solutions and services.
Spanning the next four years, the investment is intended to expand opportunities for partners to develop innovative solutions, build specialized expertise, and deliver the technology and services customers need to support business transformation and pursue improved outcomes.
It encompasses new and expanded Oracle PartnerNetwork (OPN) benefits and incentives, including planned investments in training and certification, technical enablement, development, testing and demonstration environments, cloud migration funding, go-to-market collaboration, and commercialization through Oracle Marketplace. See related Marketplace announcement.
Oracle's diverse partner ecosystem includes systems integrators, independent software vendors (ISVs), cloud and managed service providers, value-added distributors, resellers, advisory firms, and other partners. Across Oracle Fusion Applications, Oracle Database, Oracle Cloud Infrastructure (OCI), and related AI services, partners contribute in different ways, from developing complementary solutions to providing advisory, implementation, and managed services.
"Our partners extend our sales reach, expand our delivery capacity, and bring their own innovation and investment to help customers address evolving business needs," said Mark Hura, president of Oracle Global Field Operations. "Through the Oracle PartnerNetwork, we're strengthening our ability to reach more customers, deliver solutions at scale, and accelerate innovation and business outcomes."
Investing in partner growth and customer success
The Oracle PartnerNetwork gives partners the flexibility to select benefits, incentives, and resources that best support their business strategies and growth priorities. Oracle is expanding its OPN investments across four areas:
Build differentiated offerings. Oracle provides dev/test environments, technical guidance, and integration validation to help partners create innovative solutions. Partners can combine their industry expertise and intellectual property with Oracle technology to develop specialized applications, integrations, accelerators, and AI agents that address customer needs.
Sell and grow with Oracle. Sales and marketing collaboration, demonstration environments, and eligible funding and incentives for eligible opportunities help partners showcase their solutions and pursue new business opportunities. Trainings, certifications, expertise recognition, and Oracle Marketplace help partners differentiate and commercialize their offerings.
Deliver with confidence. Training and enablement, migration resources, and advisory services help partners plan and execute customer engagements. Tools and methodologies support application implementations, database modernization, integration, and cloud services.
Drive ongoing customer success. Oracle provides tools and resources, including Oracle AI Success Navigator, for partners to support customers beyond initial deployment. Partners can help drive adoption of new capabilities, optimize existing investments, and deliver ongoing innovation and business value. "Our partners have different business models, capabilities, and growth ambitions, and our investment is designed to support that diversity," said Leah Yomtovian, senior vice president, Partner, Sales, and Operations Strategy, Oracle. "By giving partners greater choice and flexibility in how they build, sell, and deliver with Oracle, we're helping them grow their businesses while bringing more innovation, specialized expertise, and value to our customers."
Connecting partner innovation with customer opportunity
The impact of partner innovation is evident in solutions that combine specialized industry and business process expertise with Oracle's applications and AI capabilities. The following examples show how that combination comes to life:
Oracle Extends Fusion Agentic Applications with Introduction of Fusion Claw
Accenture Edge Helps Combe Unify its Global Operations, Setting the Stage for AI-Powered Growth with Oracle Fusion Applications
The Centre for Addiction and Mental Health Optimizes Operations and Patient Care with Oracle Fusion Cloud Applications
Beca Transforms Finance Operations with Oracle Fusion Applications
Leah Partners with Oracle and PwC to Take Its Agentic Operating System Global To learn more about benefits, incentives, and resources available to Oracle partners, visit oracle.com/partner. All benefits and incentives are subject to applicable program terms and eligibility requirements.
About Oracle PartnerNetwork
Oracle PartnerNetwork helps Oracle and its partners drive joint customer success and business momentum. The program provides choice and flexibility across training and enablement, go-to-market collaboration, technical accelerators, and success support. To learn more, visit oracle.com/partner.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit oracle.com.
About Oracle AI World
Oracle AI World is where customers and partners discover the latest product and technology innovations, see how AI is being applied across industries, and connect with experts and peers. Attendees will gain practical tips and insights to drive immediate impact within their organizations and explore how Oracle is helping unlock the full potential of AI. Join the event to see new capabilities in action and hear from thought leaders and industry movers. Register now at oracle.com/ai-world or follow the news and conversation at oracle.com/news and linkedin.com/company/oracle.
Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.
AUSTIN, Texas, Oct. 23, 2026 /PRNewswire/ -- Oracle (NYSE: ORCL) today announced that it will hold its Investor Day Meeting at Oracle AI World, Wednesday, October 28, 2026. Oracle's Investor Day Meeting will be live at 10:55 a.m. Central Time via the Investor Relations homepage at www.oracle.com/investor.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.
Trademarks
Oracle, Java, MySQL and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.
Oracle's stock has cratered 32% this year even as its cloud business posted explosive growth and locked in hundreds of billions in future contracts. Here is why the market may be pricing this AI infrastructure giant at a historic discount.
We set a 24/7 Wall St. price target for Oracle (NYSE:ORCL | ORCL Price Prediction) at $201.27 over the next 12 months. With shares at $130.63, that points to about 54.1% upside. Our model gives the stock a buy rating.
Metric Value Current Price $130.63 Price Target from 24/7 Wall St. $201.27 Upside/Downside 54.1% Recommendation BUY Confidence Level 90% Right now the market prices Oracle like a cash-burning construction project. I see a signed AI cloud franchise with $664 billion in remaining performance obligations (RPO) and infrastructure revenue up 121%. That gap between price and fundamentals drives our target.
Shares Down 32% in 2026 Even as Cloud Revenue Jumped 62% Oracle has fallen 8.78% over the past week, 11.19% over the past month and 32.09% year to date. It now sits about 53.9% below its 52-week high of $283.40 and just 14.5% shy of its low of $114.08.
That selloff is hard to square with the latest results. In fiscal Q1 2027, Oracle posted non-GAAP EPS of $1.92 against a $1.7391 estimate. Revenue came in at $19.345 billion, ahead of expectations.
Cloud revenue reached $11.607 billion, and management raised full-year guidance to at least $90 billion in revenue and $8.10 in non-GAAP EPS.
Why Bulls See $291 on the Horizon Oracle reaches $291.19 within a year in the bull scenario, about 122.9% upside. Demand data supports that case. GPU utilization was 97.9%, and capacity that came up for renewal was renewed or resold at a 20% premium.
Oracle also signed more than $30 billion in new AI contracts that management says need no extra Oracle capital. Management expects around half of RPO to convert to revenue within 36 months. Multicloud database revenue grew 353%.
Wall Street agrees. The consensus target stands at $237.36, with 7 strong buy and 28 buy ratings. For fiscal 2028, analysts expect EPS of $10.9916.
Cash Burn Is the Risk Worth Watching The bear case lands at $171.69, which is still above today’s price. The concerns are real. Q1 capex was $28.499 billion, free cash flow was -$5.396 billion and interest expense rose 55% to $1.4 billion. Software license revenue fell 15%, and permitting in New Mexico adds execution risk.
Still, after customer prepayments, net cash capex was $18 billion, and operating cash flow hit a record. The CFO, Hilary Maxson, said new projects deliver “a free cash flow conversion ratio of something like 100% to post-tax EBITDA” once they reach full scale.
Oracle Trades at a Discount to Microsoft and Amazon Microsoft (NASDAQ:MSFT) is the most direct AI cloud comparison, since Azure competes for the same model-training customers. The stock trades at 25x forward earnings while growing revenue 17.7%. Oracle is growing faster at a lower multiple.
Amazon (NASDAQ:AMZN) earns its place through AWS, which goes head-to-head with Oracle Cloud Infrastructure and also hosts Oracle’s multicloud databases. Amazon trades at 24x forward earnings with a PEG ratio of 1.478.
Company Forward P/E PEG Ratio Quarterly Revenue Growth Oracle 18x 0.807 29.6% Microsoft 25x 1.617 17.7% Amazon 24x 1.478 19.6% The 24/7 Wall St. price target values Oracle at about 25x fiscal 2027 consensus EPS, which is in line with Microsoft. Given Oracle’s faster growth, that target looks reasonable, and arguably conservative.
Our Verdict: Contracted Demand Drives the Upside Case Our 24/7 Wall St. price target of $201.27 comes with a buy rating and 90% confidence. What tips the scale is signed demand that is already turning into revenue at premium pricing.
The bull case strengthens if RPO keeps converting and Q2 cloud growth lands within the 65%-71% guidance range. The bear case gains weight if datacenter delays or rising debt costs push profitability further out. At this price, our model projects more upside than downside.
Year Price Target from 24/7 Wall St. 2026 $139.24 2027 $201.27 2028 $269.16 2029 $337.86 2030 $377.47 Oracle needs to keep executing on its AI infrastructure expansion for these projections to hold. Faster RPO conversion could raised performance well above this path, while funding strains could pull them below it. The power, cooling, and networking suppliers behind that expansion are their own trade, and we covered seven of them in a free report on the AI boom beyond the chipmakers.
Contact [email protected] for any questions or corrections.
Oracle (ORCL - Free Report) closed the most recent trading day at $125.51, moving -2.8% from the previous trading session. The stock's change was less than the S&P 500's daily loss of 1.21%. On the other hand, the Dow registered a gain of 0.02%, and the technology-centric Nasdaq decreased by 2.6%.
The software maker's stock has dropped by 10.67% in the past month, falling short of the Computer and Technology sector's loss of 3.87% and the S&P 500's loss of 0.03%.
Market participants will be closely following the financial results of Oracle in its upcoming release. It is anticipated that the company will report an EPS of $1.88, marking a 16.81% fall compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $21.31 billion, showing a 32.68% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $8.13 per share and a revenue of $90.5 billion, signifying shifts of +6.55% and +34.36%, respectively, from the last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Oracle. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.71% upward. At present, Oracle boasts a Zacks Rank of #3 (Hold).
From a valuation perspective, Oracle is currently exchanging hands at a Forward P/E ratio of 15.89. This represents a discount compared to its industry average Forward P/E of 16.6.
Also, we should mention that ORCL has a PEG ratio of 0.75. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Computer - Software was holding an average PEG ratio of 1.42 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 43, positioning it in the top 18% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow ORCL in the coming trading sessions, be sure to utilize Zacks.com.
Oracle's new governed agents can model, re-plan and execute approved workforce processes inside Fusion applications.
Summary
Fusion Claw pushes Oracle from AI assistance toward governed enterprise execution.
Oracle, a cloud and enterprise-software provider ORCL, introduced Claw-powered Fusion HR applications as shares traded at $126.17, down 2.29%, at 11:35 a.m. ET Thursday. The pitch is straightforward: let AI carry out more of the work inside corporate HR systems. For investors, the question is whether that capability turns into stronger sales and deeper customer relationships.
The new tools tackle staffing plans, recruiting, compensation and payroll. According to Oracle's announcement, the runtime supports research, modeling and ongoing plan adjustments while keeping actions within company policies and approval processes. That could make Fusion harder to replace if customers build these tools into everyday operations. But a longer feature list does not prove customers will spend more.
The GuruFocus snapshot shows an 88/100 GF Score, with profitability and growth outpacing financial strength and valuation. That gap sharpens the investment question: can Oracle turn its AI capabilities into profitable revenue without stretching its finances? Investors need evidence of adoption, higher spending per customer and measurable productivity gains. Product announcements open the door. Execution determines the payoff.
Disclosures
I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
From AI companies financing data center projects to France's heavily indebted government, credit markets are flashing warnings as investors grow warier of borrowing risks.
Five-year credit default swap spreads have widened for CoreWeave, Oracle and SoftBank Group, as well as France and Italy, according to CNBC's analysis of FactSet data.
AI-related bonds have been selling off as markets raise the cost of capital amid concerns of a financing crunch. Neocloud demand is "off the charts," Nvidia CEO Jensen Huang told CNBC on Thursday, but he warned of a "scarcity of capital." "The demand of the capital is much greater than the availability of the capital," he said, adding, "that's going to get solved."
Countries like France face a similar crunch. Pressure is building in bond markets as investors demand more compensation to finance public debt. Recent mass protests and rioting in France have heightened the market's concerns.
"Markets may no longer want to underwrite massive capex, heavy leverage, and uncertain future cash flows, and that same shift is widening French sovereign spreads as investors demand more compensation to hold long‑duration, debt‑financed obligations from a strained state," FedWatch Advisors CIO and founder Ben Emons wrote on his "French Neoclouds" Substack post.
Insurance costs rise for AI-linked debtCoreWeave, Oracle and SoftBank are at the heart of the AI infrastructure buildout, spanning data centers, cloud services and financing.
Their five-year CDS spreads offer a window into investors' anxiety about the cost of it all and eventual payoff. Higher spreads mean more expensive default protection and can signal greater concern about a borrower's creditworthiness.
CoreWeave has experienced some of the sharpest increases in default-protection costs. Its five-year CDS spread reached 1,065.84 basis points on Oct. 21, according to FactSet, reflecting heightened concerns about the debt-heavy company's ability to finance its expansion.
At the same time Oracle's spread rose to 308.25 basis points on Oct. 21, up from 141 on Jan. 2. S&P Credit Ratings downgraded Oracle's debt to the lowest level of investment grade in July, citing the expanding infrastructure business raised the overall credit risk.
Softbank is a major AI investor with a large stake in OpenAI and investments in data centers and power infrastructure, including an $87 billion commitment for data centers in France. Its five-year CDS spread stood near a four-year high of 432 basis points on Oct. 20, up from 284 basis points on Jan. 5.
France's default-protection costs climb above Italy'sFrance isn't in a full-fledged debt crisis, but markets are signaling unease with the cost of protecting against a sovereign default rising above that of Italy's, which has also increased.
France's five-year credit default swap spread reached 89.8 basis points on Oct. 21, up from 29.74 basis points on Jan. 2, according to CNBC's analysis. Italy's spread increased to 67.1 basis points on Oct. 22 from 28.33 on Jan 2. France's budget uncertainty and debt burden have become a focus, raising concerns that the risk could spill over to other countries in Europe.
Germany's spread also rose but remained much lower at 12.15 basis points on Oct. 22, compared with 7.47 at the start of the period.
Thierry Wizman, global FX and rates strategist at Macquarie Group, pointed to France's mounting debt burden and persistent fiscal deficits as key drivers of rising default-protection costs.
"The key drivers are the large amount of French sovereign debt (120% of GDP) and the inability to reduce the deficit," Wizman told CNBC. In comparison to France, German government debt is 65% of the country's GDP.
Investors are also watching the spread between French and German bonds, considered the European benchmark of creditworthiness, which has also surged to 1.6 percentage points. France's 10-year bond yield also topped 5% for the first time since 2002. The spread between the 10-year yield on French OATs and German Bunds is the extra payment investors demand to hold French bonds instead of German.
While the Franco-German spread is relatively wide, the Eurozone saw far larger gaps in borrowing costs during the Eurozone debt crisis of the early 2010s.
France faces another test on Oct. 23 when Moody's is scheduled to review its Aa3 sovereign rating, which carries a negative outlook. The review comes as political divisions complicate efforts to repair the country's public finances.
Spillover effects to bond indexes While stresses are popping up in some pockets of AI financing, debt markets are also pricing in higher costs. S&P Global warned on Oct. 19 that major cloud providers may have more AI-linked debt exposure than publicly recognized.
CDS indexes offer a broader picture of credit-market pressure by tracking default-protection costs across baskets of companies.
North America's CDX High Yield index captures credit risk across speculative-grade companies. Its five-year midpoint spread reached 355.35 basis points on Oct. 20, up about 39 basis points from the end of 2025, according to data from LSEG.
The widening suggests investors are demanding more compensation for credit risk beyond AI-linked borrowers.
Oracle shares ORCL have come under pressure as investors assess the financing requirements of the company's artificial intelligence infrastructure expansion, although analysts at Cantor Fitzgerald and Evercore ISI believe concerns about its debt and growth prospects may be overstated. Oracle shares fell 4% to $123.94, leaving the stock down 36% in 2026 and on course for its worst annual performance since 2001, according to Dow Jones Market Data.
You are now leaving Barron's websiteBy clicking on the “Proceed” button below, you will be redirected to a third-party website owned and operated by Hong Kong Tiimoot Information Technology Co., Limited. (“HKT”), which is located in Hong Kong. That website operates independently from Barron's and Barron's does not control the website. The privacy practices of HKT are subject to its Privacy Statement, so please read it closely. We are not responsible for HKT's privacy or other data-related practices.
Oracle (ORCL -1.72%) should ideally have been one of the biggest winners of the artificial intelligence (AI) infrastructure boom, but a closer look at the company's stock price performance suggests that hasn't been the case so far.
Oracle stock has dipped 53% over the past year. The company has been taking on significant debt to fund the aggressive build-out of data center capacity to fulfill the massive contractual backlog it is carrying. The ballooning debt has caused panic among investors. However, we will look past the noise and check if Oracle can prove the naysayers wrong and head higher over the next three years.
Image source: Getty Images.
Oracle's debt is a concern, but investors shouldn't miss the bigger pictureOracle has a debt of just over $169 billion, according to Yahoo! Finance. That's significantly higher than its $37 billion cash pile. Moreover, the company's aggressive capital spending has dented its free cash flow.
ORCL Free Cash Flow data by YCharts
So, it is easy to see why investors have been spooked about Oracle's prospects, especially at a time when interest rates are rising, inflation is hotter-than-expected, and there are concerns about whether AI infrastructure companies will get access to capital amid high borrowing costs. However, that's one way to look at things.
ORCL Oracle$126.91-$2.22 (-1.72%)
NYSE · As of 10:47 AM ET 10/22/26
The reason why Oracle has been ramping up capex and is taking on debt is that it wants to quickly convert its sizable contractual backlog into revenue. The company reported $664 billion in remaining performance obligations (RPO) at the end of the first quarter of fiscal 2027 (ending Aug. 31, 2026).
The metric, which refers to the total value of a company's unfulfilled contracts at the end of a quarter, increased by $209 billion from the year-ago period. Notably, Oracle's infrastructure build-out efforts are accelerating growth. It reported a 30% year-over-year increase in revenue in fiscal Q1 to $19.3 billion, driven by a 121% spike in cloud infrastructure revenue to $7.4 billion. That was a solid improvement over the 12% revenue growth Oracle clocked in the same period last year.
Additionally, Oracle's non-GAAP earnings per share (EPS) growth rate also jumped from 6% in the year-ago period to 30% last quarter. Looking ahead, Oracle's growth is poised to continue accelerating, as the company is receiving more contracts than it can fulfill. For instance, Oracle booked over $30 billion in contracts for its cloud AI services last quarter, well above the revenue it generated during the quarter.
Moreover, Oracle has found a way to reduce the burden on its balance sheet by asking customers for prepayments or to bring their own hardware. The company notes that the "vast majority" of contracts it signed in fiscal Q1 were under these models. So, Oracle should be able to arrest the slide in its free cash flow and avoid taking on more debt under this model. Not surprisingly, analysts expect an improvement in Oracle's growth over the next two years, compared with the anticipated 34% fiscal 2027 revenue growth.
ORCL Revenue Estimates for Current Fiscal Year data by YCharts
The stock could go on a terrific bull runThe acceleration in Oracle's revenue growth should filter down to the bottom line as well, primarily due to its smart strategy of reducing costs by asking customers to prepay or bring their own hardware. This explains why analysts have turned bullish about its earnings growth prospects.
ORCL EPS LT Growth Estimates data by YCharts
What's worth noting is that analysts are anticipating a significant step-up in Oracle's earnings growth in fiscal 2029, following an increase of just 7% in the current one.
ORCL EPS Estimates for Current Fiscal Year data by YCharts
If Oracle's earnings reach $15.79 in fiscal 2029 (which ends in May 2029), its stock price could jump to $300 even if it trades at just 19 times earnings at that time (in line with the S&P 500 index's forward earnings multiple). That's 129% higher than Oracle's stock price right now, suggesting that investors should consider utilizing the recent pullback in this AI stock before it goes on a bull run.
Oracle is selling stock, piling on debt, and leaning on customer prepayments to go toe-to-toe with the richest company in cloud computing. Whether that funding gamble holds together may determine who controls the next wave of AI infrastructure.
Oracle's cloud backlog is surging past $664 billion while free cash flow sits deep in negative territory, and the CFO refused to name a date when that flips. Something has to give, and figuring out which side breaks first changes…
Oracle (NYSE:ORCL | ORCL Price Prediction) trades at $131.14. Its low multiple used to look like a bargain, but now it looks like a fair price for a company that has to borrow and issue stock to build its AI cloud.
Oracle sells databases, enterprise applications and, more and more, AI training and inference capacity. Cloud now makes up 60% of total revenue, up from 48% a year ago. The stock has fallen 52.08% over the past year and sits far below its 52-week high of $283.40.
A Cheap Multiple Attached to Triple-Digit Infrastructure Growth
Bulls point to the price. At about 16x the $8.10 non-GAAP EPS guide for this fiscal year, and roughly 12x the $10.9916 consensus for next year, Oracle costs less than many slower-growing software names. Its PEG ratio is 0.807.
The growth is real. Cloud infrastructure revenue rose 121% to $7.39 billion, and remaining performance obligations reached $664 billion. GPU use was 97.9%, and renewed capacity was repriced at a 20% premium to prior contracts. Analysts made 35 upward and 1 downward full-year EPS revisions over the past 30 days.
Negative Free Cash Flow Is Eating the Growth Story
Free cash flow was negative $5.4 billion last quarter, following negative $23.7 billion in fiscal 2026. Management still expects $90 billion to $95 billion in capex this year. Interest expense rose 55% to $1.4 billion. After completing a $20 billion equity sale, Oracle plans to raise about $40 billion more through debt and equity.
The chief financial officer declined to say when free cash flow turns positive: “We haven’t given a particular timeframe on that yet.” Gross margins are also expected to step down. A CNBC Fast Money panelist put it bluntly: “There are plenty of other ways to play this story with better balance sheets.”
Backlog Conversion Will Decide the Argument
Management expects around half of RPO to convert into sales over the next 36 months. Next quarter’s guide calls for revenue growth of 30% to 34% and EPS of $1.85 to $1.93. If Oracle hits those numbers and gives a free cash flow timeline, today’s price could prove too low. If margins slip or financing costs keep rose, it could still fall further.
Analysts Stay Bullish While Shares Trail the Market Badly
The average analyst target is $237.36, meaning about 81% upside. That figure comes from 43 analysts. Price targets are one data point, and none of them are guarantees:
Strong Buy: 7
Buy: 28
Hold: 7
Sell: 1
Oracle is down 31.85% year to date, while the S&P 500 is up 12.78%. Over the past month, Oracle fell 10.88% as the index gained 0.97%. Shares trade below both the 50-day ($144.77) and 200-day ($159.87) moving averages.
Oracle’s Valuation Hinges on Cash Flow Catching Up to the Backlog
At $131.14, Oracle’s risks outweigh its cheap multiple.
Oracle beat on growth and the stock still fell, which tells you investors now care more about funding than about bookings. Shares gave up an early post-earnings gain and ended the day down nearly 2% even after Oracle beat estimates. Downside could come within the next two quarters from more dilution, rising interest costs and lower near-term estimates. Analysts already made 23 downward revisions to the February-quarter EPS estimate in 30 days.
A firm free cash flow timeline, or proof that operating margins are expanding as capacity increases, would change this view. Until one of those shows up, the low multiple reflects real balance sheet risk.
A low multiple only pays off if the cash eventually reaches shareholders, and Oracle has yet to show when that happens.
Contact [email protected] for any questions or corrections.
New Fusion Claw applications help business and HR leaders achieve defined workforce outcomes with greater speed and confidence by continuously adapting and executing complex work with enterprise governance
, /PRNewswire/ -- HR Technology Conference -- Oracle today announced new Fusion Claw-powered agentic applications for HR. Oracle Fusion Claw is a governed agentic execution runtime that enables Fusion Agentic Applications to reason, compute, adapt, and execute specialist-grade work including deep research, computation, simulation, modeling, and continuous replanning. Built into Oracle Fusion Cloud Applications, the new Claw-powered agentic applications help organizations take on complex, high-value work more autonomously at scale, within established governance controls, from adapting staffing plans and aligning workforce demand with capacity to accelerating recruiting and payroll operations.
"Business and HR leaders need a complete view of their workforce to make faster, more confident decisions about skills, staffing, labor costs, and employee experience, but business is moving too quickly for them to connect, assess, and take all the actions on their own," said Lewis Thompson, senior vice president, Applications Development, Oracle. "With Claw-powered Fusion Agentic Applications for HR, business and HR leaders can reimagine the way they work by moving to governed action across core workforce processes. The applications reason across Oracle Fusion Applications data, provide context, coordinate the work required to meet business objectives, and carry out human-approved actions. This will help leaders drive stronger workforce outcomes with greater speed, consistency, and confidence."
Agentic Applications represent a new class of outcome-based applications that provide Fusion Applications customers with a system of outcomes, where people define the objectives, authority, and accountability and the Agentic Applications coordinate the process to get to an outcome, within those parameters. Fusion Claw enables Agentic Applications to take on more complex, specialist-grade work by providing a new execution runtime that supports larger-scale and longer-running work, continuous replanning, deterministic execution, and governed automation, within organizational policies and controls.
Running on Oracle Cloud Infrastructure, powered by industry-leading LLMs, and extending the world's most complete suite of cloud applications, the new Fusion Agentic Applications move beyond assistance to governed execution, helping business and HR leaders improve outcomes while maintaining established oversight and approvals. New Fusion Agentic Applications available within Oracle Fusion Cloud Human Capital Management (HCM) include:
Workforce Planning and Operations:
Workforce Orchestration: Develops workforce plans that balance demand shifts, cost, and operational continuity by evaluating development, redeployment, hiring, and external talent options, then coordinating and launching actions that are approved through organizational review.
Positions Command Center: Works to avoid potential disruptions from position changes by connecting position, employee, recruiting, cost, and approval data to surface conflicts and downstream risks, then routing recommended corrective actions for review and approval.
Talent Acquisition:
Candidate Sourcing: Allows organizations to fill priority roles faster and strengthens candidate pipelines by analyzing workforce demand, grouping candidates for appropriate action, and coordinating outreach, campaigns, and follow-up communications aligned with established recruiting processes and approvals.
Recruiting Command Center: Keeps hiring workflows on track by bringing together job, candidate, interview, feedback, offer, and demand data; highlighting recruiter actions and candidates ready to advance; and preparing next steps for recruiter consideration and approval.
Workforce Rewards and Payroll:
Workforce Compensation: Develops recommendations for fair, budget-aligned compensation plans by evaluating options against employer-defined criteria, budgets, pay guidelines, and relevant equity considerations, then preparing plans that align with organizational policies for human review and approval.
Payroll Command Center: Works to identify potential payroll issues and improve run readiness by reviewing employee data, imports, timecards, retroactive changes, and historical patterns at scale; highlighting issues and potential causes; and preparing recommended follow-up actions for review.
Payroll Activity Workspace: Supports payroll and financial reporting activities by comparing current pay, balances, and costs with prior periods; highlighting material variances; and preparing recommended follow-up actions for review and approval.
The new Claw-powered Fusion Agentic Applications are part of a broader Fusion AI ecosystem anchored by Oracle AI Agent Studio for Fusion Applications. With the Fusion Agentic Applications Builder and AI Studio Skill no-code and pro-code capabilities in Oracle AI Agent Studio, organizations can create and manage agentic applications using reusable Oracle, partner, and external agents. In addition, built-in observability, ROI measurement, and safety controls enable agents to deliver measurable value and operate responsibly at scale.
To learn more about Oracle Fusion Applications, visit www.oracle.com/applications
For employment-related workflows, organizations retain responsibility for employment decisions and can establish appropriate human oversight, approval processes, and controls consistent with their policies and applicable legal requirements.
About Oracle Fusion Cloud Applications
Oracle Fusion Cloud Applications are a complete suite of cloud applications that form the enterprise system of record, spanning finance, HR, supply chain, manufacturing, sales, service, and marketing. The suite includes Oracle Fusion Cloud Enterprise Resource Planning (ERP), Oracle Fusion Cloud Human Capital Management (HCM), Oracle Fusion Cloud Supply Chain & Manufacturing (SCM), and Oracle Fusion Cloud Customer Experience (CX).
Fusion Agentic Applications extend that foundation into a system of outcomes. They can coordinate and execute end-to-end work toward business objectives, and are designed to operate within the policies, controls, and authority each organization defines. With Oracle AI Agent Studio for Fusion Applications, customers and partners can create, extend, and manage these agents and agentic applications, combining trusted enterprise data with the security, data governance, and performance needed to operate at scale.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.
Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.
Oracle Health and Oracle Fusion Cloud Applications will help bring data together, streamline work, and support a more connected patient experience
, /PRNewswire/ -- Southwest General, a private, not-for-profit, acute care hospital in Middleburg Heights, Ohio, is expanding its relationship with Oracle. Building on its use of Oracle Health Foundation EHR and the recent integration of Oracle Health AI Agents, clinical note capabilities, to help automate routine administrative tasks and give physicians more time with patients, Southwest General is adopting Oracle Health Patient Accounting, Oracle Health Data Intelligence, and Oracle Fusion Cloud Applications. These applications will help unify clinical, financial, and operational information, simplify workflows, and support informed care decisions across the organization.
As an independent community-focused health center, Southwest General is working to alleviate administrative complexity created by disconnected financial, operational, and health information systems. By expanding its use of Oracle technology across the enterprise, Southwest General will build an integrated environment that helps its team access the right information when and where it needs it, reduce manual processes, and spend more time supporting patients throughout their healthcare journeys.
"At Southwest General, we are taking control of our digital transformation to build an environment that works better for our patients and for the people who care for them," said Jae Zayed, chief digital and information officer, Southwest General. "With Oracle, we are bringing our clinical, financial, and operational systems into a shared environment to better equip clinicians and staff with the information and tools they need to focus on what matters most—delivering high-quality care. This investment will help us improve the experience for our team and for the patients and families who rely on us."
Southwest General will use Oracle Health Patient Accounting to create a comprehensive view of key financial information for its revenue cycle team. By bringing billing, payments, claims, and account information into one system, Oracle Health Patient Accounting can help reduce manual work, support accurate billing and faster payment processing, and make it easier to address patient questions. Streamlining these processes can improve the experience for both patients and staff while supporting stronger revenue operations.
Oracle Health Data Intelligence will help Southwest General bring health data together in a central environment, making relevant patient information easier for its care team to access. With a more complete view of information they need, clinicians can make more informed care decisions, better coordinate care, and identify opportunities to improve the patient experience.
To complement these solutions, Southwest General plans to adopt the full Oracle Fusion Applications suite including: Oracle Fusion Cloud Enterprise Resource Planning (ERP), Oracle Fusion Cloud Enterprise Performance Management (EPM), Oracle Fusion Cloud Human Capital Management (HCM), Oracle Fusion Cloud Supply Chain & Manufacturing (SCM), and Oracle Fusion Cloud Customer Experience (CX). Together, these AI-powered enterprise applications will help Southwest General standardize processes, improve visibility into enterprise performance, and establish a scalable foundation for continued innovation.
"Our community deserves care and service supported by modern capabilities that help us meet today's healthcare challenges," said Darrell Lentz, chief financial officer, Southwest General. "Oracle is giving us the platform and unified data environment to leapfrog years ahead of industry leaders, helping our team make more contextually aware care decisions, manage the revenue cycle with greater confidence, and operate with greater agility. This is about raising the bar for the care and service we provide to our community."
"Healthcare organizations need connected systems that make it easy for people to do their best work and focus on the people they serve," said Seema Verma, executive vice president and general manager, Oracle Health and Life Sciences. "By connecting care delivery, revenue cycle, and enterprise operations with Oracle, Southwest General is equipping its team to work from a more complete picture and helping create a more coordinated, responsive experience for its community. Oracle is proud to support its continued leadership and innovation."
To learn more about how Oracle Health is helping transform healthcare, visit www.oracle.com/health.
About Southwest General
Southwest General Health Center is a private, not-for-profit, 368-bed acute care hospital located in Middleburg Heights, Ohio. Founded in 1920, Southwest General has a long-standing reputation for clinical excellence, compassionate care, and personalized service. The hospital is home to nationally recognized physicians and offers comprehensive, high-quality care supported by advanced technology and a commitment to continuous improvement. Dedicated to serving the communities southwest of Greater Cleveland, Southwest General partners with patients and families to deliver exceptional care close to home.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit www.oracle.com.
About Oracle Fusion Cloud Applications
Oracle Fusion Cloud Applications provide an integrated suite of AI-powered cloud applications that enable organizations to execute faster, make smarter decisions, and lower costs. Oracle Fusion Applications include:
Oracle Fusion Cloud Enterprise Resource Planning (ERP): Provides a comprehensive suite of AI-powered finance and operations applications that help organizations increase productivity, reduce costs, expand insights, improve decision-making, and enhance controls. Oracle Fusion Cloud Human Capital Management (HCM): Provides a unified AI-powered HR platform that connects all people-related processes and data to help organizations automate tasks throughout the employee lifecycle, improve the employee experience, and give HR leaders actionable workforce insights. Oracle Fusion Cloud Supply Chain & Manufacturing (SCM): Provides a unified AI-powered platform that integrates supply chain and operations processes and helps organizations enhance resilience and quickly adapt to market changes. Oracle Fusion Cloud Customer Experience (CX): Provides a suite of AI-powered applications that help organizations manage marketing, sales, and service processes to win business, build stronger customer relationships, and improve customer experiences. Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company, ushering in the new era of cloud computing.
MUMBAI, India--(BUSINESS WIRE)---- $LTM #AI--LTM today announced the launch of BlueVerse™ ValueMesh™ to help enterprises industrialize AI across the Oracle transformation lifecycle.
Oracle is burning through cash faster than it earns revenue, its credit rating sits one notch above junk, and a TD Cowen analyst now suspects its biggest chip supplier may be quietly backstopping the whole expansion.
On October 20, 2026, TD Cowen analyst Michael Elias wrote that Nvidia (NASDAQ:NVDA | NVDA Price Prediction) may be helping Oracle (NYSE:ORCL) secure lender funding for its AI data centers. Neither company has confirmed this, and the size of any support remains unquantified.
Oracle closed at $131.14, up 1.20%. Nvidia fell 0.29% to $216.47. Oracle’s small gain follows a 52.06% drop over the year. The stock is much cheaper, but the company may now be relying on its largest chip supplier to keep building.
Two Ways Nvidia Could Back Oracle’s Leases
Elias based his view on channel checks, which means conversations with people in the industry. He found that Nvidia may be giving Oracle “credit support” in one of two ways.
The first is a credit guarantee. Nvidia would stand behind Oracle’s lease payments, so data center owners still get paid if Oracle runs into trouble; the second is a sublease in which Nvidia would lease the buildings itself and then rent them to Oracle. In both cases, lenders would be counting on Nvidia’s stronger credit, which makes them more willing to fund construction.
Elias linked the agreement to Oracle’s reported five-year deal with Tencent. Under that deal, Tencent would lease about 100,000 advanced AI chips in Oracle data centers in Southeast Asia. The lease is estimated at about $7 billion, with roughly 30% paid upfront. That deal is still unconfirmed, and the countries involved have not been disclosed.
Oracle’s Cash Gap Explains Why It Would Want Help
Cloud infrastructure revenue grew 121% to $7.4 billion last quarter. But Oracle spent $28.5 billion on buildings and equipment, more than its total revenue of $19.3 billion, and free cash flow was negative $5.4 billion.
To keep building, Oracle sold $20 billion of stock during the quarter. It needs the capacity to deliver on $664 billion in remaining performance obligations, which is revenue customers have signed up for, but Oracle has not yet booked. S&P Global (NYSE:SPGI) cut Oracle to BBB-, its lowest investment-grade rating, in July. Back in January 2026, a separate TD Cowen report said lenders had roughly doubled the extra interest they charge Oracle for data center project loans.
Management has already said that some suppliers let Oracle pay for capacity as its own customers pay. Oracle also said it signed more than $30 billion of first-quarter contracts without putting in additional capital of its own.
Nvidia Has Already Described This Kind of Deal
On its August 26, 2026 earnings call, Nvidia described take-or-pay commitments. Under these, Nvidia pays for part of a facility’s capacity. It must pay whether or not it gets used, which gives lenders “the confidence to underwrite the project.” Colette Kress, who was chief financial officer on that call, added: “We’re not making loans.”
Nvidia has disclosed guarantee obligations capped at $108.5 billion. That call did not name Oracle as one of the companies receiving support, so TD Cowen’s view remains unconfirmed.
What Each Company Gains and Risks
Nvidia keeps demand for its chips strong. But it takes on the risk that a customer can’t pay, and that risk may not show up clearly on its balance sheet. On October 19, S&P warned that big tech companies may carry more AI-related obligations than they report. That adds to existing concerns about circular financing, where a supplier helps pay for purchases of its own products.
Oracle gets cheaper money to build with, but it becomes more dependent on Nvidia. For a company worth $397.4 billion, that is a reasonable price for keeping construction on schedule.
Oracle’s Valuation and Downgrade Risk Ahead of December Earnings
Oracle trades at about 18 times expected earnings, and analysts’ average price target is $249.11. If Nvidia’s support proves real, it would lower borrowing costs that helped drag the stock down.
The main risk is another downgrade. A cut below BBB- would put Oracle’s debt in the junk category, meaning below investment grade, and raise its borrowing costs across the board.
You can check this thesis against Oracle’s December earnings report. The bullish case has two requirements. Net cash capital spending, meaning spending after customer prepayments, must stay within Oracle’s guidance of not more than $70 billion for the year, and either company must confirm the support. The case breaks if free cash flow gets worse and no confirmation comes.
Contact [email protected] for any questions or corrections.
Elon Musk spent last week spooking AI cloud investors with a single word, then reversed course entirely on a SpaceX earnings call, and now Nebius and CoreWeave shares are racing to recover ground while one critical market signal holds the…
Relief is flowing back into the specialized AI cloud providers that absorbed the biggest damage in last week’s selloff. Nebius Group (NASDAQ:NBIS | NBIS Price Prediction) stock is at $176.60, up 3%, a rebound that recovers part of last week’s damage. Likewise, CoreWeave (NASDAQ:CRWV) stock is at $63.77, up 3%, matching the gain in Nebius shares.
Oracle (NYSE:ORCL) stock trades at $132.92, up 1%, a smaller gain than Nebius and CoreWeave shares are posting. Cloud stocks as a group are lagging as well, a sign that the buying is narrow. The First Trust Cloud Computing ETF is at $164.95, up by only 0.9%.
Large-cap tech is trailing Nebius and CoreWeave shares by an even wider margin. As a tech-sector check, the Invesco QQQ Trust (NASDAQ:QQQ) is at $721.68, up 0.6%.
Musk Calls AI Overcapacity Talk ‘Ridiculous’
After the prior session’s close, SpaceX (NASDAQ:SPCX) held its Q3 2026 earnings call. On that call, SpaceX founder Elon Musk called talk of excess capacity in AI infrastructure “ridiculous,” adding, “I don’t think we’re going to have a demand issue here.” He also stated that SpaceX is “hounded relentlessly by every hyperscaler and by dozens of smaller companies to rent more of our compute.”
The comment on the SpaceX call reverses the tone Musk struck last week, when he posted “Yikes” on X in response to rising yields on CoreWeave’s bonds. That post helped fuel a selloff in shares of CoreWeave, Nebius and other AI cloud names. Musk’s new remarks arrived alongside a SpaceX report showing Super Intelligence segment revenue up 830% year over year to $7.6 billion.
Nebius and CoreWeave Lead a Narrow Rebound
Specialized cloud providers Nebius and CoreWeave rent graphics processor capacity to AI developers, while Oracle sells that compute as one part of a much larger software and database business. Oracle stock entered the rally down 32% year to date (YTD), and its diversified base cushions the downside while damping the upside in sentiment swings like this one.
Nebius chief revenue officer Marc Boroditsky said Nebius funds its growth through equity raises, convertible offerings and upfront customer payments, a mix that steers clear of the kind of debt behind last week’s concerns. Boroditsky added that Nebius could sell all of next year’s planned capacity immediately at current prices. Remaining performance obligations at Nebius total $37.5 billion, giving that claim contractual backing.
Even after the recent drawdown, Nebius stock carried a 105% YTD gain into the rally, giving holders a large cushion. Biggest spending at Nebius cut the other way, since the company spent $8.13 billion on graphics processor and data center infrastructure in the first half of 2026. Three customers also each accounted for more than 10% of Nebius revenue in its latest quarter, a concentration that raises its risk profile.
Demand at CoreWeave looks similar, with a revenue backlog of $104 billion at the end of Q2 2026 and more than $25 billion of net new customer commitments added in early Q3. CoreWeave CEO Michael Intrator declared in the Q2 report, “CoreWeave reached an important inflection point this quarter as our scale began to translate into expanding operating leverage.” One uncertainty for CoreWeave is its reliance on debt to fund that expansion.
Financing Questions Decide the Next Leg for Neoclouds
A key question for Nebius is whether financing worries fade as demand commentary stays strong. Rising yields on CoreWeave’s bonds started last week’s slide, making the debt market the clearest gauge of sentiment toward neocloud stocks.
Musk stated he was “fairly confident” SpaceX could bring an incremental 10 gigawatts of compute online in 2027. SpaceX also guided for Q4 2026 capital expenditures of $35 billion to $40 billion, a spending pace that supports the demand case for AI capacity providers.
That scale of spending has to land somewhere, and the power, cooling, and networking suppliers behind the data centers tend to be the quieter beneficiaries. We pulled seven of them into a free report you can grab here.
Payback on SpaceX’s existing compute deployments runs less than a year at current pricing, according to management, a sign that rental demand still outpaces supply. Nebius and CoreWeave shares remain volatile, so investors weighing their exposure should adjust their holdings carefully given that a fresh shock from the bond market could reverse the bounce.
Contact [email protected] for any questions or corrections.
New platform enables customers and partners to easily and securely create, extend, deploy, and manage industry-specific AI agents and teams of agents across the enterprise
AUSTIN, Texas, /PRNewswire/ -- Oracle today announced Oracle AI Agent Studio1 for Industry Applications, a no-code and low-code environment for creating, testing, orchestrating, deploying, and managing AI agents and workflows for industry-specific business processes. Building on Oracle AI Agent Studio for Fusion Applications, the new offering enables customers and partners to build and extend agents, leveraging existing application data, tools, and business processes, and embed these agents into daily workflows to reduce manual effort and improve productivity.
"AI agents create value when they can work within the processes, data, and controls that define how an industry operates," said Simon de Montfort Walker, executive vice president, Industry Applications, Oracle. "Oracle AI Agent Studio for Industry Applications gives customers and partners the building blocks for those processes, along with the flexibility to adapt, test, and manage agents for their own needs. This approach helps organizations focus their time and effort on areas that will help them grow their business and serve their customers more effectively."
Building and operating AI agents around business outcomes
Oracle AI Agent Studio for Industry Applications helps accelerate agent development with prebuilt agents, workflows, templates, and reusable tools designed around industry-specific business processes. With the platform, customers and partners can adapt these capabilities to their business needs and configure agents around their own data, decisions, roles, and policies. Users can also test and debug agents before deployment and monitor execution, performance, and AI-unit consumption as adoption grows.
The platform provides customers and partners with:
Reusable industry foundations: Build upon prebuilt industry agents, workflows, templates, and tools to accelerate agent development and reduce the need to create each use case from scratch.
Natural-language and visual authoring: Create and extend agents using natural language instructions and visual workflow editing, including defining roles, goals, tools, policies, and operating context.
Cross-application orchestration: Coordinate supported agents, tools, and services across Oracle Industry and Oracle Fusion Cloud Applications to support multi-step business processes and workflows across applications.
Model Context Protocol (MCP) support: Connect agents to approved Oracle Industry Application tools and capabilities through MCP servers for reuse across multiple use cases.
Choice of generative AI models: Select from supported models available through Oracle Cloud Infrastructure (OCI) Enterprise AI based on the requirements of a particular agent or use case.
Testing and debugging: Test agent responses, actions, and tool use before deployment. Trace workflow execution, inspect inputs and outputs, evaluate results, identify issues, and retest changes.
Enterprise security controls: Apply guardrails and help ensure agents operate within configured permissions, policies, and organizational roles, while managing access to applications, data, and tools.
Deployment and lifecycle management: Move agents from development and testing toward production and manage them throughout their lifecycle, with deployment and runtime-management capabilities available for supported use cases.
Monitoring and observability: Monitor agent execution metrics, performance, reliability, usage, and AI-unit consumption to manage adoption with greater visibility and control.
"As organizations continue to operationalize AI across their enterprise, the challenge is AI agents are only as useful as the data, tools, and approvals they can reach, and connecting all three reliably is where most efforts stall," said Eric Newmark, GVP and General Manager of Enterprise Business Applications, IDC. "Oracle AI Agent Studio for Industry Applications goes after that friction directly. It lets teams build, test, and manage agents inside the industry workflows they already run. That is what turns adoption from a pilot into something practical, and something that scales."
Delivering industry AI agents designed around specific business processes
Designed to work with Oracle Industry Applications, Oracle Fusion Applications, and OCI, Oracle AI Agent Studio for Industries coordinates agents and multi-agent workflows across supported applications and connects them with relevant application data, tools, services and pre-built agents for supported use case. This integrated approach helps reduce the need to move data or build point-to-point integrations for individual supported use cases, while enabling agents to operate within configured access controls and policies.
Oracle AI Agent Studio for Industry Applications supports a broad range industry-specific use cases, including engineering and construction, retail, finance, restaurants, government, utilities, communications, and hospitality.
For example, a construction and engineering firm can use the platform to identify risks to schedule milestones, determine related field issues, and propose specific mitigation steps for project teams to execute, helping teams take action earlier to protect project timelines.
Likewise, a retail customer or partner can leverage Oracle's retail industry applications and agents to extend and customize areas such as images, product information, and product and catalog management. And financial services customers and partners can leverage and extend agents in areas such as payments, affordability, analysis, and customer preferences.
What partners have to say:
"Across sectors, we're seeing growing demand for AI agents that reflect the unique realities of an industry, its processes, data and operating environment. As organizations move from AI experimentation to value realization, industry context will be critical," said Nick Yoko, Oracle AI Lead at KPMG. "Oracle AI Agent Studio for Industry Applications reflects an important shift toward more industry-specific AI, creating opportunities for clients to apply agents to the business challenges and opportunities that matter most."
"For organizations to realize the value of AI agents, they need confidence in how those agents make decisions, access data, and operate within business controls," said Kevin Sullivan, Global and US Oracle Alliance Leader, PwC. "Oracle AI Agent Studio for Industry Applications brings industry context together with testing, monitoring, and configured access controls, helping organizations build governance into their workflows as they expand AI adoption."
Learn more at: https://www.oracle.com/industries/ai-agent-studio/
1: Oracle Industries AI Agent Studio is planned to be available within the next 12 months, in the U.S. with expansion to all supported OCI Enterprise AI regions planned over time.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at oracle.com.
Trademarks
Oracle, Java, MySQL and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company--ushering in the new era of cloud computing.
The artificial intelligence (AI) infrastructure build-out is expensive.
OK, that's underselling it. In fact, the current spending spree is one of the largest capital outlays in modern history. Adjusted for inflation, this year alone will see more spent on AI-related infrastructure projects than was spent during the entire decade-long Apollo program.
Over the next few years, global AI capital expenditures will be measured not in the hundreds of billions of dollars but in the trillions -- and two of the biggest spenders will undoubtedly be Oracle (ORCL +1.20%) and Microsoft (MSFT -0.31%).
But which of these AI compute giants stands to benefit most from all that spending, and which is the better buy?
Oracle: Surging growth, negative free cash flow On the top line, Oracle has been doing quite well. Sales grew from $57.4 billion in its fiscal 2025 to $67.4 billion in its fiscal 2026 -- mostly on the back of its AI efforts.
Sales from its Oracle Cloud Infrastructure (OCI) unit -- which leases massive data centers and rents out AI compute -- jumped 121% year over year to $7.4 billion as of its most recent quarter, fiscal 2027 Q1.
Image source: Getty Images.
And there's plenty more business waiting, too. Companywide remaining performance obligations (RPO) -- contracted sales for services it hasn't delivered yet and, therefore, can't count as revenue yet -- reached an incredible $664 billion last quarter.
Of course, nothing is free, and Oracle's cash picture looks strained, to say the least. Its capex reached $55.7 billion last year, exceeding its operating income. As a result, its free cash flow (FCF) -- the money left over after running the business and paying for capital projects -- turned negative to the tune of a $5.4 billion loss in the latest quarter.
ORCL Oracle$131.14+$1.55 (+1.20%)
NYSE · As of 4:00 PM ET 10/20/26
And mind you, Oracle has increasingly worked out deals where customers pay up front. Its FCF could get much worse before it gets better.
To help cover the gap, Oracle has turned to debt. As of the end of August, the company had $125 billion in long-term debt on the books, and that figure excludes another $288 billion in data center lease commitments it hasn't begun paying.
Investors are becoming more concerned about that borrowing, too. Last week, the cost of insuring Oracle's debt against default reached record levels, exceeding levels seen during the financial crisis.
Microsoft: Slower growth but still free cash flow positive Microsoft sales grew from $281.7 billion in its fiscal 2025 to $331.8 billion in fiscal 2026, with Azure and other cloud services revenue jumping 43% year over year in its most recently reported quarter -- not quite as fast-growing as Oracle Cloud Infrastructure.
Of course, Azure is already much larger. Microsoft's intelligent cloud segment revenues (which include Azure) hit $39.3 billion last quarter. It's easier for OCI to grow more rapidly on a percentage basis, given that it's less than one-fifth the size of Microsoft's intelligent cloud.
On the cost side, Microsoft spent $35.8 billion on capex last quarter, which is considerably less than it brings in from operations, so the company was still FCF positive -- it booked just shy of a $20 billion surplus.
Microsoft's debt picture is much less strained, too. At the end of June, Microsoft had about $40.3 billion in debt, down from $43.2 billion a year earlier, though it also had $329.1 billion in leases that have yet to begin.
Which AI compute giant is the better buy over the next five years? If everything goes perfectly, Oracle would likely have more upside. Its cloud business is growing faster, and that unit makes up a larger part of its financial mix than the corresponding business does for Microsoft. Both companies have backlogs of a similar scale, but Oracle's cloud sales are less than a fifth of Microsoft's. It just has a relatively bigger opportunity.
But I don't think things will go perfectly. Five years is a long time, especially considering we are already seeing signs of delays in key data center projects across the country, notably a significant potential delay in Oracle's Project Jupiter data center in New Mexico. I think this is only likely to get worse, and Oracle doesn't have a lot of breathing room.
Microsoft is exposed to those sorts of risks, too, but it has far more financial flexibility to deal with them. For my money, that makes it the better bet, and I expect Microsoft stock to outperform Oracle's over the next five years.
DUTCH ASSET Corp grew its stake in Oracle Corporation (NYSE:ORCL – Free Report) by 31.0% during the third quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The firm owned 19,925 shares of the enterprise software provider’s stock after purchasing an additional 4,716 shares during the period. Oracle makes up approximately 1.3% of DUTCH ASSET Corp’s portfolio, making the stock its 20th biggest holding. DUTCH ASSET Corp’s holdings in Oracle were worth $2,736,000 at the end of the most recent reporting period.
Several other large investors have also modified their holdings of the stock. Sherman Asset Management Inc. increased its stake in Oracle by 5.5% in the 1st quarter. Sherman Asset Management Inc. now owns 1,054 shares of the enterprise software provider’s stock valued at $155,000 after buying an additional 55 shares during the period. Global Financial Private Client LLC raised its position in Oracle by 0.8% during the 1st quarter. Global Financial Private Client LLC now owns 7,836 shares of the enterprise software provider’s stock worth $1,153,000 after buying an additional 59 shares during the last quarter. Key Financial Inc raised its position in Oracle by 0.4% during the 1st quarter. Key Financial Inc now owns 14,203 shares of the enterprise software provider’s stock worth $2,089,000 after buying an additional 62 shares during the last quarter. Gould Asset Management LLC CA lifted its stake in shares of Oracle by 2.0% in the 1st quarter. Gould Asset Management LLC CA now owns 3,172 shares of the enterprise software provider’s stock worth $467,000 after acquiring an additional 62 shares during the period. Finally, One Charles Private Wealth Services LLC lifted its stake in shares of Oracle by 1.6% in the 1st quarter. One Charles Private Wealth Services LLC now owns 3,859 shares of the enterprise software provider’s stock worth $568,000 after acquiring an additional 62 shares during the period. Hedge funds and other institutional investors own 42.44% of the company’s stock.
Oracle News Roundup
Here are the key news stories impacting Oracle this week:
Positive Sentiment: Healthcare AI partnership: Oracle and AstraZeneca agreed to explore AI and real-world data tools that could improve clinical-trial recruitment, accelerate evidence generation, and connect research with patient-care workflows. The deal expands Oracle’s AI opportunity beyond cloud infrastructure and data centers. Oracle and AstraZeneca Partner to Advance AI-enabled Healthcare Innovation
Positive Sentiment: Potential AI infrastructure support: TD Cowen said Nvidia may be helping finance Oracle’s new AI data centers, potentially easing the burden of Oracle’s large infrastructure spending. Reports also highlighted strong progress at the Project Jupiter campus. Nvidia May Be Helping Finance Oracle’s AI Data Centers
Positive Sentiment: Improving demand and bullish valuation views: A BNP Paribas reseller survey pointed to stronger software and AI demand, while Bank of America maintained a highly optimistic outlook and estimated substantial upside. Oracle’s multicloud database revenue has also reportedly grown rapidly, supporting its cloud strategy. Oracle Sees Stronger AI Demand as BNP Paribas Survey Shows Major Improvement
Neutral Sentiment: Long-term opportunity versus valuation: Commentators see Oracle’s cloud growth, database position, and AI backlog as potential catalysts, but some argue the stock remains overvalued relative to execution and financing risks. Oracle Is Winning in AI, but It’s Still Overvalued
Negative Sentiment: Debt and buildout concerns: Investors remain worried that Oracle’s aggressive AI data-center expansion could require substantial external financing. Rising borrowing costs, possible credit-rating pressure, and reports that credit-default protection has become more expensive have weighed on the stock. Credit Stress Is Threatening to Unwind the AI Bull
Insider Activity at Oracle
In related news, CEO Michael Sicilia sold 22,562 shares of the business’s stock in a transaction dated Tuesday, September 22nd. The shares were sold at an average price of $151.59, for a total transaction of $3,420,173.58. Following the sale, the chief executive officer owned 182,929 shares of the company’s stock, valued at approximately $27,730,207.11. The trade was a 10.98% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Stephen Rusckowski acquired 25,000 shares of the firm’s stock in a transaction that occurred on Tuesday, September 29th. The shares were bought at an average cost of $139.35 per share, for a total transaction of $3,483,750.00. Following the acquisition, the director owned 25,390 shares of the company’s stock, valued at $3,538,096.50. This represents a 6,410.26% increase in their position. The SEC filing for this purchase provides additional information. Insiders sold 36,075 shares of company stock worth $5,342,123 over the last 90 days. Company insiders own 38.40% of the company’s stock.
Oracle Trading Up 0.9%
NYSE:ORCL opened at $130.77 on Wednesday. The stock has a fifty day moving average price of $144.66 and a two-hundred day moving average price of $158.56. The stock has a market capitalization of $395.42 billion, a price-to-earnings ratio of 19.06, a PEG ratio of 0.91 and a beta of 1.78. The company has a debt-to-equity ratio of 1.89, a quick ratio of 1.17 and a current ratio of 1.17. Oracle Corporation has a 1 year low of $114.50 and a 1 year high of $287.19.
Oracle (NYSE:ORCL – Get Free Report) last released its earnings results on Thursday, September 10th. The enterprise software provider reported $1.92 EPS for the quarter, beating analysts’ consensus estimates of $1.74 by $0.18. Oracle had a return on equity of 48.85% and a net margin of 26.36%. The company had revenue of $19.34 billion during the quarter, compared to the consensus estimate of $19.13 billion. During the same quarter last year, the company earned $1.47 earnings per share. Oracle’s quarterly revenue was up 29.6% compared to the same quarter last year. Oracle has set its Q2 2027 guidance at 1.850-1.930 EPS and its FY 2027 guidance at 8.100-8.100 EPS. As a group, sell-side analysts anticipate that Oracle Corporation will post 6.73 earnings per share for the current fiscal year.
Oracle Dividend Announcement
The business also recently disclosed a quarterly dividend, which will be paid on Friday, October 23rd. Investors of record on Friday, October 9th will be paid a $0.50 dividend. The ex-dividend date is Friday, October 9th. This represents a $2.00 annualized dividend and a dividend yield of 1.5%. Oracle’s dividend payout ratio (DPR) is 31.35%.
Analysts Set New Price Targets
Several brokerages have recently weighed in on ORCL. Citizens Jmp reaffirmed a “market outperform” rating and issued a $285.00 target price on shares of Oracle in a report on Friday, October 2nd. Stifel Nicolaus dropped their price target on shares of Oracle from $220.00 to $200.00 and set a “buy” rating on the stock in a research note on Friday, September 11th. KeyCorp set a $285.00 price target on shares of Oracle in a report on Friday, September 11th. Yorkville Ives assumed coverage on shares of Oracle in a report on Wednesday, October 7th. They set an “in-line” rating and a $155.00 price target for the company. Finally, DZ Bank restated a “buy” rating on shares of Oracle in a research report on Thursday, September 17th. One research analyst has rated the stock with a Strong Buy rating, thirty-five have issued a Buy rating, nine have issued a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus price target of $249.52.
Get Our Latest Analysis on Oracle
Oracle Company Profile
(Free Report)
Oracle Corporation (NYSE: ORCL) is a global technology company that develops enterprise software, cloud infrastructure and database technologies. Its products help organizations store, manage, analyze and secure data, while supporting business operations across industries and geographies.
The company’s offerings include Oracle Database, Java, Oracle Cloud Infrastructure and a broad portfolio of cloud-based applications. These applications serve functions such as enterprise resource planning, financial management, human resources, supply-chain management, customer experience and industry-specific operations.
Further Reading
Five stocks we like better than Oracle
Aurora Rejects Curaleaf’s Higher Bid, But the Takeover Fight Isn’t Over
Centrus Energy Is Building a Nuclear Fuel Powerhouse—Why Is Its Stock Struggling?
Halliburton Gains Traction: Multiyear Upcycle Ahead
Meta Platforms’ AI Comeback Faces an Earnings Test—And a $10 Billion Charge
Receive News & Ratings for Oracle Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Oracle and related companies with MarketBeat.com's FREE daily email newsletter.
In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Lou Whiteman, and Jon Quast discuss:
Oracle is already preparing for delayed data centers.Is its commitment to OpenAI a reason behind it?Mailbag: How to handle spinoffs.Latin American and European fintechs are coming to America.Mailbag: European AI Infrastructure stocks?To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.
A full transcript is below.
This podcast was recorded on Sept. 24, 2026.
Tyler Crowe: Oracle is forcing the issue with AI. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today, I'm joined by longtime Fool contributors, Lou Whiteman and Jon Quast. Guys, we had a plan for today, but using the term from one of our prior hosts, the news fairies showed up right before we recorded, and we decided we had to change it up a little bit. We're going to start today with the news that Oracle has called Force Majeure on a new data center project in New Mexico. I want to channel my Ron Burgundy voice from Anchorman ‘cause boy, that escalated quickly. Basically, Oracle is claiming that it isn’t liable for costs or expenses if this project, I think it’s called the Jupiter project, is delayed. It's supposed to come online in 2028, and this story almost reads like a usual suspects lineup of the infrastructure play or theme that we've seen, especially a lot of the ones where the thesis is a little bit shakier. We have a subsidiary of private capital company Blue Owl is the developer. Obviously, private capital and developing has been a challenge one there. It is one of the big projects backed by OpenAI and SoftBank, and additionally, on the energy side, it's the one project that has committed to using fuel cells, which has been part of the thesis for Bloom Energy getting into the AI infrastructure trade. We've got a lot of things up in the air here. This project was announced two years ago and wasn't expected to come online for a bit. All of these stocks are down to date. Guys, what was your reaction to this? Because I found this one alarming.
Jon Quast: It makes total sense to me that Oracle would make this move, and here's why. Nobody is going to argue that Oracle isn't pushing the limits when it comes to extending itself to fund the data center infrastructure build-out. It is absolutely extending itself. Now, you can succeed even when you extend yourself; you have to make sure that money coming in is going to cover the money going out. When it comes to this data center in particular, there are reasons to think that maybe this doesn't come up when Oracle wants it to come up, when it expects it to, when it needs it to. The tide of opinion, public opinion, has turned violently against data centers. I would say it's maybe even worse in left-leaning states such as New Mexico, where this particular project is. There is real reason to say there might be delays from regulatory bodies, from all things that could push back when Oracle is able to monetize this data center. It makes sense to me that it would put this clause in place so it's not having to make payments before it is generating revenue. That doesn't necessarily mean that the project is doomed. It doesn't necessarily mean that Oracle is now in big trouble, but it does point to the fact that Oracle has extended itself, and it really can't start making those payments before it is getting the job done there on the project.
Lou Whiteman: Here we go, Tyler, exactly what you said, that we have all of these companies that have been in the headlines. I think Jon's right that a lot of this is technicality, reserving rights. I do think it's fun, and we should talk about it in a second: why now? Why this second? Because I want to speculate there. But look, I think this is really useful for investors, whether or not it's good news or bad news. Jon says, left-leaning states, but we're seeing moratoriums in Texas. We're seeing moratoriums all over the place. We've been saying forever this is going to come up. There's been an open debate among pundits, among analysts, among lawyers about exactly what would happen, who's liable, how much liability, where it all falls. I think it would be really useful for it to play out once. We could answer these questions instead of yelling across the aisle at each other, so bring it on. If Oracle is successful in this, it takes pressure off Oracle and maybe some of the other ones that are making commitments; maybe it means more commitments. It might mean people are more aggressive because they can go further onto thin ice and be safe. If they get slapped here, it could at least cause a rethinking. If they do walk away, can Blue Owl backfill we get a test on demand? There are so many questions that have been out there, as hypotheticals or as stuff for people like us to argue about without anybody knowing that maybe if this plays out, we'll start to get answers too. As an investor, that's clarity over time.
Tyler Crowe: I've got a couple of questions here, and one of them, I may actually have to put on a conspiratorial tin hat, and you may have to walk me off the ledge here a little bit. But here are some of the reactions I immediately thought of when I saw this: No. 1: Oracle's calling Force Majeure two years before they even have to make a payment on anything. That was, in some sense, to me, alarming. Coming from oil and gas, when I hear Force Majeure, it's like something bad happened right now, and I can't deliver on a contract like three months from now; two years is a long development time. The fact that they're already calling this is somewhat questionable because I think we have been talking about this development; Oracle has been, as we've said, one of the shakier ones. It's been using off-balance-sheet deals to get it done, taking on a lot more debt relative to the Alphabets, the Amazons, the worlds to do it. As quickly call Force Majeure, I found fascinating and also a little bit on the competitive position here. Here's my conspiratorial thought; you can walk me off the ledge here, but Oracle has been doing a lot of these deals with OpenAI, where it's like, OpenAI, they take an investment in OpenAI. We've talked about these circular financings, and now all of a sudden, all of these AI companies are delaying their IPOs for safety reasons. Or they're saying safety reasons. We've seen a lot of stories coming out about obvious safety questions. Part of me is saying maybe Oracle's doing this because they know they are going to struggle to get paid from the people that they said they got the commitments from.
Lou Whiteman: I think that's interesting. I think that my conspiracy theory on these safety things is that these companies pre-IPO want to focus on revenue and not the science project, and that would mean maybe not the frontier models getting all of the attention and so less compute needed. It's hard to say, but I think that's possible. I said why then and why now. I think are very interesting questions. I think the why them versus, I don't know, Alphabet or someone else that's doing this is because, as we know, Oracle is starting from a weaker foundation. They do have thinner ice here, not that it's too thin, not that they're going to fall, but they do have less resources to back this up. The why now fascinates me because you're right: I could be that, or it could be that either Oracle is taking questions on this based on what they've already borrowed and some of their creditors are asking questions, or it could mean they want to do more deals and the threat of this or the liability attached here is holding things back. The big takeaway: we don't know. A lot of it is speculation, but the big takeaway here is, I guess, what we already knew is that Oracle isn't coming from a position of strength, period.
Jon Quast: I'll meet you halfway, Tyler. When you think about where everything is going, it's undeniable that the long tail is still in place. We are reimagining the entire infrastructure of the Internet, and I don't think that anything stops this train. But everything is so fast-changing that who is leading? How are they leading? What are the compute requirements to do that? It changes so quickly that anything is up for debate, and whether or not OpenAI, specifically, is saying, oh, we're needing to rethink some things here with our situation with Oracle. That is a valid question to be asking and wondering if that conversation isn't happening in another room.
Tyler Crowe: All I'll say is, if there's one thing that can stop this train, it's been very good at stopping trains in the United States, it's litigation in court. I think we have a fascinating story coming up here. We'll get a little bit back more on schedule coming up after the break.
ADVERTISEMENT: They say leadership isn't about where you're going. It's about the conviction it takes to get there. For those who demand the world and possess the drive to claim it, there's a vehicle of equal distinction. Dynamic by design and engineered for pure impact, the Range Rover Sport rises to meet you the moment you take the lead. This is the most advanced Range Rover Sport yet, a master class in uncompromised performance and unbridled agility. Inside, the innovation is seamless. You'll find an elegant 13.1-inch touchscreen that puts total control of the vehicle's systems right at your fingertips, but it's the refinement that sets it apart. Sculpted 22-way heated seating with built-in massage function ensures every journey is defined by peerless comfort. Whether it's through unique interior finishes or custom wheel options, the ways to personalize your Range Rover Sport are nearly unlimited. Command attention and experience ultimate luxury and motion. Exclusive offers are available now. Explore further at rangerover.com.
Tyler Crowe: Now, normally, we do a listener question at the end of the show, but today we got a pretty meaty question here, so I wanted to give us a little bit of extra time to discuss it. Remember, if you have a question, go ahead and email us at podcast at fool.com. That's podcast with an S. We've also got the email in the show description, cause you need it there. Today's question comes in from Zack, and guys, I'm going to split it up because, like I said, meaty question, several questions, and I thought it was worth diving into. Hi, Motley Fool team, longtime listener and love the show. With Medtronic recently launching a voluntary exchange offer to separate its diabetes business, MiniMed, I have been thinking about how everyday investors should evaluate these types of corporate actions. Since you provide great high-level educational perspectives in the mailbag. Thanks, Zack. Could you break down how splits and exchange offers work? We'll start with the first question that he wants specifically. The dividend investor dilemma: how should income-focused investors weigh keeping an established dividend payer versus swapping for a fast-growing, non-dividend peer play, even with a built-in incentive? In this case, for the Medtronic MiniMed thing, there's a 7% valuation discount that you get as an investor as part of the spinoff. Guys, a dividend investor getting a non-dividend stock in an exchange. How does this work? What are your thoughts?
Jon Quast: There's a reason why we don't give personalized investing advice on this show. It's not covering our back end. It literally is because so much of investing is personal, and you would need to know somebody's personal situation so intimately, and we don't speak to individual situations. It's very relevant for this question. The debate between dividend income and growth, revenue growth specifically. I would say that on paper, it makes sense to go with growth. Boston Consulting Group did a long study over 20-year rolling periods, I believe it was, or maybe it was 10-year rolling periods, showing that among the top quartile of best-performing stocks, growth was the biggest contributing factor to the gains. On paper, that, to me, points to: I want to maximize my portfolio for growth because that's going to outweigh the boost that dividends provide. However, real-life investing doesn't take place on paper. It takes place in the real world where I have real concerns, I have emotions, and I have things that I want to see in my portfolio. Maybe people don't want to have the volatility that comes with growth, and that is part and parcel to that method of investing. It really depends on the situation. I think that having a stack of consistent dividend-paying stocks makes sense in a diversified portfolio. I also see the rationale in saying, I'm going to trade out this dividend payer for a better growth opportunity. I think either can make sense depending on your situation.
Lou Whiteman: I think Zack tipped the scales for me in how he worded the question because he said, how should an income-focused investor? Again, I don't know, Zack. I can tell you, though, how I would think about this. If I bought Medtronic for the dividend, if I'm focused on income, I'm probably keeping the income, and I'm going to be more swayed by keeping Medtronic and keeping the dividend. The great thing about this, and he asks also how do split and exchanges work. It's basically tax-free. Sometimes you get both; sometimes you got to choose one or the other, in this case, but it's a tax-free carving up at the company. Here's the great thing: you can have both. You can keep your Medtronic and buy the other company, MiniMed, buy shares for the same tax implications if you want. You don't have to choose. Your choice would be you have to commit new capital. But if you are an income-focused investor and that's the reason you bought a dividend stock, I think if it was me, I'd probably lean towards keeping the dividend stock. If you're focused on growth and you bought Medtronic because you were excited about the growth, then probably the dividend means less to you, and maybe you look at the other one.
Tyler Crowe: Here's the second part of the question, and I'm going to try to make it a little bit more general because Zack's question is a little bit focused on the healthcare part, but in terms of your portfolio strategy, what does it signal when an established giant company divests a smaller unit that, as a result, it drives up top-line revenue but makes for lower margins. It can go in a lot of different directions here, and I'll let you guys go, and then I'll finish up.
Lou Whiteman: The first thing that comes to mind, I think, with any split or anytime a company breaks itself in two, there is, if you think about it, a war for capital inside any company with multiple divisions. Not everybody gets the same amount of capital; the parent, the CEO, only has so much allowance to give to its subsidiaries, and they're fighting for it. In general, in theory, why splits work is that competition goes away. Both companies, in this case, you have a maybe slower growth and a faster growth. They can allocate capital towards the needs of their specific business. That is the bull case for splits in general. Whether or not it's a good idea, bad idea, I think that's an individual case-by-case thing. I will say, in this case, a huge flag is that they are offering a premium for investors to take Medtronic. They are offering that Zack mentioned, a 7% valuation discount. Now, it could be because Medtronic is a dividend player. They think their investment base is less interested in growth, so they're trying to even the playing field that way with their target audience, or it could be a signal that the market is probably favoring Medtronic. It's hard to give one-size-fits-all answers here, but I do think you have to read the individual situation and figure out what are the signals telling? If I'm playing poker with Medtronic here, what is the tell here? What are they telling me that they're not telling me that I can use to make a decision?
Jon Quast: I like this move as far as splitting out MiniMed from Medtronic. I think it was a good move. When you talk about the difference in the growth rates, it's not that different. I mean MiniMed is better, but it's not drastically in another category of growth level. It's mid-single digits and high single digits. It's not that huge of a difference, but the profit margin difference is quite significant. It does make sense to me for Medtronic to spin out MiniMed and then be able to dedicate its own capital to growing its higher-margin business. That, to me, is going to potentially grow profits faster at Medtronic than what the profits are going to grow at MiniMed. It makes a lot of sense to me that it would make this move, but stop me if you've heard this one before; if we're taking broad takeaways here, every deal is different. Everything is unique, and so each one does need to be examined on the merits. There are times in the past where I thought that a business made a mistake to split up a company, make a corporate move like that, and there are other times that it was clearly the right move. I would say, do your best to see what is motivating it. Is it a good business decision? Can you see the business rationale, or does it feel like we're trying to rally the shareholder troops or something and make it seem like we're doing something when really both ships are going down?
Tyler Crowe: To speak more generally to it, and I think you guys would likely all agree with this is sometimes the consensus thesis is wrong, and perhaps your own thesis is wrong as well. We've seen plenty of cases where we've had splits or divestitures or spinoffs or something like that, and the market consensus was, oh, this was the great part, and you're left with the duds, and what ended up happening was that theoretical dud ended up doing much better. I think the General Electric split was a great example. Everyone thought that GE Healthcare was the cash-generating crown jewel that got split off. It's true; it generated a lot of cash. But they thought GE Vernova was going to be the problem child. We look, since the split, GE Vernova has been, by far, the greatest performer out of all of those, in large part because of shifting dynamics and whatnot. But whatever your initial thoughts may be with a lot of these spin-offs, reserve the right that it could change. Coming up after the break, we're going to talk about fintech and the changing landscape there.
ADVERTISEMENT: Do more of what you love all day long. Get the new iPhone 18 Pro on EE with a big leap in battery life to keep you streaming, browsing, and connecting for longer. With EE's Fast Lane, you can do it all, even in the biggest crowds. The Ultimate Pro iPhone deserves the ultimate network. EE does more. Fast Lane requires eligible plan and 5G Plus coverage; UK's Best network, rankings based on RootMetrics, RootScore Report H1 2026. Verify at ee.co.uk
Tyler Crowe: We're actually going to start today's show with this news story, but with the Oracle news, we thought we needed to stop there. This particular story here, I think, goes under the category. Be careful what you ask for, because we've seen a lot of fintech companies going public recently, doing actually relatively well, and a lot of them have been arguing against regulations in the banking industry because they're protecting the entrenched interests. They've gotten what they've asked for with more lax regulations as of late, and as a result, we're going to see some very large competition coming into the space. Latin American fintech company Nubank and European fintech giant Revolut. These are companies that are much larger than a lot of the fintech companies we see in the United States today. They are actually looking to get banking charters and looking to come to the United States, in large part because the United States banking industry is so much larger than in their current markets, and they see it as an opportunity for growth despite all of the entrants in the market already in the United States. Guys, when I read this report, the immediate thing that I said was, wow, the barriers to entry in this industry mustn't be as much as some of the bulls in the fintech business thought it was. What does this say about the industry?
Lou Whiteman: I'll tell you, this is confirmation bias for me. I go back to the 1990s when I had to sit through the Stonier School of Banking, and I remember something stayed with me and guides me here: is that really all this industry is doing, is buying and selling money and trying to make money that way. Almost all innovation in this space is marketing, and that's why I've avoided the fintech because I think this is another reminder of how easy it is to compete here. There are 8,000 banks and credit unions in this country. There are over 500, maybe close to 1,000, online-only. There's nothing special about any of these things. At the end of the day, banking is a simple business anyone can grab share with either strong marketing or aggressive pricing and hold your valuations accordingly.
Jon Quast: Why does Nubank and Revolut want to come to the U.S.? The answer is: why wouldn't they want to? This is a huge market, and the opportunity right now, with people in charge of the federal banking area saying the USA is now open for business, unlike how it has been in the past. This is the window. They're saying this is a huge market opportunity, and regulatory environment is such that we're going to be able to waltz in to lose point; what they do with it from there is really how they run the campaigns. It's not like this is a growing space necessarily; the U.S. market is very saturated. Can you take share with good optics? I think that you can. There might be a little bit of an opportunity here. I think that the bigger issue with fintech right now is not necessarily the barriers to entry. It is more the shifting dynamics. I do think that the agentic economy, to go back to what we were saying earlier, nothing stops this train. I think that nothing stops the agentic layer that is being built right now. We're seeing it happen where I'm telling my AI agent to do certain transactions on my behalf. I think that it's only going to get more profound, and what does that do to your fintech layer of the Internet?
I think that things get different really fast. I think that this points to companies that have a network effect that we're saying, hey, this is why we have an advantage here, such as Block's Cash App. I think that is one that might be challenged in this environment, this growing agentic economy. I think that it points to the physical point-of-sale device, perhaps being a little bit of a moat in some ways because the agentic commerce angle does not impact what I do at a stadium when I buy a hot dog. That's still going to be a physical transaction. A physical point-of-sale device where those companies are able to have a take rate, that seems a little bit more durable to me. I think your Shift4 payments, I think that your Toast. I think those are layers that are able to endure a little bit, but I think that some of your pure-play Internet Fintech, those may see their margins start to contract.
Tyler Crowe: Lou, as we finish out here, Revolut it's still privately traded. I think it's about a $120 billion valuation on the private markets. It's looking at doing an IPO, perhaps in a dual listing U.S., London sometime in 2027, 2028. With that in mind, Jon highlighted some of the companies he sees as benefitors of this specific trend or the lack of competition. Are there any companies that you see that are beneficiaries of this more lax regulation or the shifting sands, I guess, if you will, in the fintech?
Lou Whiteman: The issue I have with all of this is that I don't think that there is innovation that really makes consumers' lives better. There is temporary pricing power. We saw SoFi for all of its success, and SoFi has been a great success in growing its customer list. They've done that at the expense of cross-selling, so profitability, and also they've done it with irrational pricing or less rational pricing. There is a yang for every yang. I don't think that for all the rhetoric, we're bringing new people in. I don't think things are shifting that much. If there is opportunity, and this is the most boring way to look at it though, I think you're going to see a lot of credit unions convert the banks and become stocks, and those are some of the small caps that I think are tomorrow's big winners. That's where I'm looking here. As for fintech, it is a commodity; even Toast things someday can be whittled away to a commodity. Be aware. They can be good businesses, but pay an appropriate valuation for these things.
Tyler Crowe: Lou, thrift conversions to stocks from credit unions sounds like the most Lou thing imaginable for this.
Lou Whiteman: There's a lot of money to be made, Tyler.
Tyler Crowe: That's all the time we have for today. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against. Don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provide for informational purposes only. To see our Fool advertising disclosure, please check out our show notes. Thanks to our producer Dan Boyd and the rest of the Motley Fool team. For Jon, Lou, and myself, thanks for listening, and we'll chat again soon.
Oracle stock ORCL gained 1.92% on Tuesday as the company expanded its artificial intelligence ambitions through a healthcare collaboration with AstraZeneca, while analysts pointed to improving software demand and potential support from Nvidia for its data-centre expansion.
The healthcare partnership will explore technology to help clinicians identify patients for clinical trials, improve treatment pathways and connect medical research with routine care.
The initiative adds to Oracle's efforts to expand its AI applications beyond cloud infrastructure.
However, the company continues to face scrutiny over the cost of its data-centre investments and the financing required to deliver previously contracted capacity.
The broader market reversed losses on Tuesday after oil prices fell. The Dow Jones was up 1.06% at the time of writing. The S&P 500 gained 0.46% while the Nasdaq Composite rose 0.2%.
TD Cowen said Nvidia could be providing credit support to Oracle as the cloud computing company expands its data-centre footprint.
Analyst Michael Elias wrote in a research note that the firm's latest checks indicated Nvidia was supporting Oracle either through financial backstops or by leasing computing capacity directly and subleasing it to Oracle.
TD Cowen said this could partly explain Oracle's recent data-centre leasing activity in Southeast Asia in support of its reported agreement with Tencent.
The analyst also said Oracle was in active discussions about vendor financing as it sought to deliver capacity already contracted with customers.
Such arrangements could help the company manage the costs associated with expanding its infrastructure.
TD Cowen views Oracle's return to leasing as a potential indication of future growth in remaining performance obligations, a measure of contracted revenue yet to be recognised.
The developments come as investors assess the financial risks associated with the rapid expansion of AI infrastructure and the debt needed to fund it.
A separate survey by BNP Paribas indicated that demand for Oracle's software products improved in October after weakening in July.
Analyst Stefan Slowinski said the company's trailing spending score, which measures spending over the previous three months, was surprisingly strong.
Europe was a particular bright spot in the latest survey.
Generative AI remained the category with the highest demand, replacing cybersecurity at the top of the survey's spending rankings.
Human capital management and procurement recorded the weakest demand.
Slowinski said the results could indicate that generative AI was reaching a level of maturity at which businesses were allocating more budget to the technology.
Oracle's database services offered through Amazon Web Services and Microsoft Azure moved into the survey's top three most-in-demand products.
Oracle Cloud Infrastructure and Fusion applications also recorded improvements.
The survey found positive results for Amazon Web Services, Google Cloud and Microsoft, while IBM, Zoom and Adobe recorded weaker scores.
Snowflake also outperformed competitor Databricks in the survey, supported by demand for its Data Science and Snowpark offerings.
Database and cloud software major Oracle Corp. (ORCL, Financials) has indicators that its drive into AI is turning into higher client demand.
BNP Paribas said its latest software reseller survey revealed a “impressive inflection” for Oracle, with the October findings better than worse readings in July. The major change was generative AI.
GenAI has already eclipsed cybersecurity in terms of demand, according to the report, indicating that firms are moving out of the testing phase and are starting to invest real budget.
Oracle seems to be the immediate beneficiary. Its DB@AWS and DB@Azure solutions leaped into the top three most demanded products, while Oracle Cloud Infrastructure and Fusion also improved.
That important because those products are supporting both sides of the investment case.
OCI helps drive expansion, while database services operating within competitor clouds can assist produce higher-margin software income.
BNP Paribas also cited positive results for AWS, Google Cloud and Microsoft, while Adobe, Zoom and IBM fell behind in areas of the poll.
For Oracle investors the question is whether this more aggressive reseller engagement translates into sustainable revenue growth.
The next thing to look for is if Oracle's impending findings support the survey's indication of improving demand.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
#1 (Strong Buy) stocks have produced an unmatched +23.82% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Oracle (ORCL - Free Report) Austin, TX-based Oracle Corporation is one of the largest enterprise-grade database, middleware, and application software providers.
ORCL is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 15.95; value investors should take notice.
16 analysts revised their earnings estimate higher in the last 60 days for fiscal 2027, while the Zacks Consensus Estimate has increased $0.10 to $8.13 per share. ORCL also boasts an average earnings surprise of +15.5%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, ORCL should be on investors' short list.
On Tuesday, October 20, Bank of America (NYSE: BAC) reviewed its outlook for Oracle (NYSE: ORCL) and seemingly came to the exact same conclusion as in early June – that the stock is set for a major rally.
Specifically, BofA analyst Tal Liani published a note rating ORCL shares as a ‘Buy’ and estimating they will soar 80.83% from their press time price of $132.72 to $240 within the next 12 months.
Notably, the Wall Street expert first made this forecast early in June when Oracle stock was changing hands at roughly $206 and only started the descent that took it, by press time on October 20, 35.51% lower.
Oracle stock price YTD chart with performance since BofA originally issued the ORCL target highlighted. Source: Google
At the time, BofA cited the technology giant’s $50 billion equity and debt raises as factors reducing concerns regarding the firm’s data center buildout, as well as the broader software sector strength.
In July, Oracle’s credit rating was downgraded to BBB– – one step above ‘junk’ – and the most recent developments threaten to degrade it even further. Additionally, the company issued a force majeure notice for its New Mexico data center in late September, though Oracle claimed the decision represents a relatively commonplace move and is unremarkable.
Such notices are usually issued to protect firms in case of massive disruption, such as wars or natural calamities.
Wall Street sets Oracle stock price for the next 12 months
Elsewhere, despite appearing exceedingly bullish given the recent developments, BofA’s latest Oracle stock price target is slightly below the Wall Street average.
Indeed, ORCL shares are, overall, considered a ‘Strong Buy’ and boast twenty-seven positive, four ‘Hold’, and one ‘Sell’ recommendation, per the data Finbold retrieved from TipRanks on Tuesday, October 20.
The average price target is likewise bullish and estimates that ORCL equity will soar 87.68% to $249.11 in the next 12 months.
Wall Street sets Oracle stock price for the next 12 months. Source: Google
Still, October revisions were generally more conservative. Out of the three provided since the month started, only BofA opted for a ‘Buy’ recommendation, while RBC Capital’s Matthew Hedberg and Dan Ives – perhaps the biggest technology bull on Wall Street – rated the shares as ‘Neutral’.
Featured image via Shutterstock
Best Crypto Exchange for Intermediate Traders and Investors
Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.
0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
Copy top-performing traders in real time, automatically.
eToro USA is registered with FINRA for securities trading.
30+ million
Users worldwide
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
Join Finbold's newsroom, become a Sales Executive today!
Apply now to join Finbold as a crypto/finance news writer!
HSBC is doubling down on its bearish call against CoreWeave just as credit markets start flashing distress signals, and the selloff is spreading to a rival that was never even named in the note.
Debt-funded AI cloud providers are back under pressure as concerns about borrowing costs spread across the group. First of all, CoreWeave (NASDAQ:CRWV) shares are down 4% to $58.67 in morning trading.
Moreover, Nebius Group (NASDAQ:NBIS | NBIS Price Prediction) shares are falling harder, down 5% to $162.20. However, Oracle (NYSE:ORCL) stock is only down 0.52% to $128.95, a comparatively steady contrast to the slide in CoreWeave and Nebius shares.
That split shows strain concentrated in the most debt-reliant corner of AI infrastructure, where CoreWeave and Nebius both operate. With its far broader revenue base, Oracle stock sits outside the worst of the selling.
HSBC Doubles Down on Its Reduce Call
HSBC repeated its Reduce rating on CoreWeave in a note on Monday. The accompanying price target sits well below where CoreWeave shares last closed, leaving little doubt about the direction of that call.
CoreWeave’s central challenge is revenue per megawatt of capacity, which could trail what larger cloud providers earn. Those bigger rivals offer broader services. They serve more diversified customers, giving them more ways to make money from each data center they run. Scale matters here, because bigger platforms can spread their costs across many products.
Two more pressure points weigh on CoreWeave. Slower growth at AI model developers could soften demand for short-term capacity, and rising borrowing costs make new infrastructure harder to finance.
Borrowed Money Links CoreWeave and Nebius
CoreWeave and Nebius both rent AI computing capacity and fund much of their data center expansion with debt, and this structure ties each company’s economics directly to financing costs. When lenders demand higher rates, CoreWeave and Nebius feel the pressure on every new facility.
Nebius shares are slipping further than CoreWeave shares even though the bearish note names only CoreWeave. The gap marks the move as pressure on debt-funded neoclouds (specialist providers that rent out GPU capacity) as a group.
Recent dealmaking at CoreWeave looks healthy. The company signed several high-priced short-term capacity contracts between May and September and reports a large revenue backlog. On Monday, CoreWeave shares touched a new one-year low and closed slightly lower. Credit markets are flashing more stress, with CoreWeave’s bond yields and credit default swap pricing at distressed levels.
Oracle and Cloud Funds Hold Their Ground
Oracle’s database and enterprise software revenue sits alongside its cloud infrastructure business. That mix gives Oracle several income streams beyond leased AI computing capacity. With Oracle shares flat, CoreWeave and Nebius shares stand apart from the wider cloud group.
A pair of funds shows how contained the damage to CoreWeave and Nebius looks. The First Trust Cloud Computing ETF (NASDAQ:SKYY) is unchanged at $161.08, even though it holds both CoreWeave and Oracle shares. Large-cap tech is softer: the Invesco QQQ Trust (NASDAQ:QQQ) is down 0.75% to $712.98.
CoreWeave’s Financing Test
CoreWeave now faces the question of whether it can finance new capacity without borrowing costs climbing further. CoreWeave’s high-priced contracts and large backlog give the bullish case real substance, while distressed credit pricing gives the bearish case equal weight. That tension leaves CoreWeave stock highly sensitive to any shift in credit conditions.
Every new data center at CoreWeave depends on fresh funding, so the cost of that money matters as much as customer demand. Investors should consider keeping their position sizes modest until CoreWeave’s financing question resolves.
Contact [email protected] for any questions or corrections.
Oracle announced a healthcare artificial intelligence collaboration with AstraZeneca on Tuesday, expanding its ambitions beyond data centres as investors scrutinise the cost of its cloud infrastructure expansion.
The companies plan to explore technology that helps clinicians identify patients for clinical trials, improve treatment pathways and connect medical research with routine care.
The agreement carries no disclosed financial value and remains non-binding. Nevertheless, it highlights a business opportunity for Oracle: selling specialised healthcare technology to hospitals and pharmaceutical companies rather than relying solely on computing capacity for AI developers.
The partnership combines Oracle's healthcare data, cloud systems and AI tools with AstraZeneca's drug development and clinical expertise.
Its first planned programme targets hypertension care and clinical research in Abu Dhabi alongside healthcare group M42. The companies want to help doctors identify patients with uncontrolled high blood pressure and match eligible participants to trials.
Projects could address cancer, cardiovascular conditions, respiratory diseases and rare disorders across the US, Europe and Middle East.
Oracle chief executive Mike Sicilia said in Tuesday's announcement that “some of the most important opportunities for AI are in healthcare”, where better use of data could improve patient outcomes.
AstraZeneca chief executive Pascal Soriot similarly argued that linking scientific research with clinical technology could identify patients earlier and improve trial recruitment.
The commercial appeal lies in embedding AI in everyday medical work, potentially making Oracle's software more valuable to healthcare customers.
Oracle expects its healthcare business to return to double-digit growth in fiscal 2027, helped by AI-enabled improvements to its Cerner healthcare management systems.
AstraZeneca could broaden that opportunity into clinical research, drug safety monitoring and use of real-world evidence to guide care.
However, neither company has committed to revenue targets, a contract value or a rollout timetable. A non-binding agreement is not a guaranteed commercial order.
The sensitive nature of medical information adds a hurdle. AstraZeneca said it would not receive patient-identifiable data, while projects must satisfy legal, ethical, privacy and regulatory requirements before proceeding.
The companies intend to establish shared governance and measures to assess outcomes, but success will depend on whether hospitals can use the tools effectively and whether buyers ultimately pay for them.
Healthcare AI could create recurring software revenue, although the announcement offers no basis for estimating how much.
Oracle's push into medical applications comes against a demanding financial backdrop.
The company reported negative free cash flow of $23.7 billion in fiscal 2026 after investment in cloud infrastructure. It also outlined plans in June to raise approximately $40 billion through debt and equity financing in fiscal 2027.
S&P Global lowered Oracle's credit rating to BBB- in July, the lowest investment-grade level, citing pressure from AI spending.
Mark Habib, S&P's global head of digital infrastructure, warned that “there is more (debt) out there that we are not seeing” in complex AI financing arrangements, according to Reuters. He said the agency saw no immediate reason to change ratings.
Oracle said customer prepayments and customer-supplied chips reduce how much capital it must raise for data centres.
Healthcare software may eventually deliver less capital-intensive revenue, but it still depends on secure cloud infrastructure and faces lengthy adoption cycles.
The final Oracle (NYSE: ORCL) dividend of 2026 is coming this week, with investors who have secured shares in the software company on time set to receive a payment unchanged from the previous quarters.
Specifically, Oracle will once again pay a quarterly dividend of $0.5 per share on Friday, October 23, 2026. The ex-dividend date of October 9 has long past, meaning only those who held ORCL shares prior to that will be eligible for a payout.
Oracle dividend schedule. Source: Dividend.com At a payout of $0.5, 100 ORCL shares will generate exactly $50 in Oracle stock dividends for the fourth quarter of 2026. Comparatively, 500 shares will earn $250, while 1,000 shares translate into $500.
The payout comes as Oracle stock trades at $129.59, down nearly 13% on the monthly chart. At that price, a 100 ORCL share investment is worth $12,959 at press time. On the ex-dividend date, however, it was worth $14,140, as the stock was changing hands at $141.4 at the time.
Oracle dividend details As mentioned, this week’s payment remains unchanged from the previous quarter. In fact, the last ORCL dividend increase came in the second quarter of 2025, when the payout was lifted from $0.4 to $0.5 per share. In other words, 100 ORCL shares will have netted $200 in taxable dividend income this year.
The company rewards shareholders on a quarterly basis, and it has an average price recovery of 6.2 days. Currently, the payout ratio is at around 18.15%, while the yield sits at 1.54%, slightly above the industry average of 1.37%.
According to the current estimates retrieved from Dividend.com, Oracle’s first 2027 dividend payout could come on January 22, 2027. If predictions are correct, the figure will once again remain unchanged.
Featured image via Shutterstock
Best Crypto Exchange for Intermediate Traders and Investors
Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.
0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
Copy top-performing traders in real time, automatically.
eToro USA is registered with FINRA for securities trading.
30+ million Users worldwide
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD
Join Finbold's newsroom, become a Sales Executive today! Apply now to join Finbold as a crypto/finance news writer!
Expanded availability gives customers more options to deploy and procure Red Hat technologies on OCI
RALEIGH, N.C.--(BUSINESS WIRE)--Red Hat, the world's leading provider of open source solutions, today announced expanded availability of its industry-leading open hybrid cloud portfolio on Oracle Cloud Infrastructure (OCI). This includes Red Hat Enterprise Linux as a first-party offering in the OCI Console. In addition, Red Hat Ansible Automation Platform, Red Hat Enterprise Linux, Red Hat OpenShift and Red Hat OpenShift Virtualization subscriptions are available through the Oracle Marketplace, helping organizations optimize existing cloud investments and build a more consistent foundation for next-generation workloads.
Powering enterprise AI workloads with Red Hat Enterprise Linux for OCI
Marking a significant milestone in Red Hat’s long-standing collaboration with Oracle, the first-party availability of Red Hat Enterprise Linux on OCI makes it easier for customers to access and deploy the world’s leading enterprise Linux platform. This helps optimize compute-intensive workloads at scale, including machine learning and emerging AI workloads.
Red Hat Enterprise Linux for OCI delivers more consistent hybrid cloud security and control by enabling organizations to deploy pretuned, ready-to-run Red Hat Enterprise Linux images across OCI public clouds and in the future, distributed cloud deployments. This approach supports consistency across hybrid environments. As a first-party offering on OCI, Red Hat Enterprise Linux empowers organizations to operate with greater confidence and enterprise support by providing a complete standardized path for building, deploying and managing critical applications with integrated management capabilities and observability tooling. Key benefits include:
Integration with OCI: Customers can access Oracle-specific performance profiles and flexible compute shapes, including Red Hat Enterprise Linux 9 and 10 images for Intel and AMD fully virtualized instances, optimized for OCI infrastructure. Native OCI telemetry services integration: Red Hat Enterprise Linux instances connect directly to Oracle's integrated monitoring, the OCI command-line interface, API, and console. Hybrid cloud consistency: Red Hat Enterprise Linux for OCI delivers the same security-focused operating system across on-premises and OCI environments, reducing configuration drift and staff retraining costs during cloud migration. Enterprise-grade support with unified escalation: OCI customers can receive front-line support through Oracle Support. Ease of procurement: OCI customers can use 100 percent Oracle Universal Credits drawdown for purchasing Red Hat Enterprise Linux for OCI, with simplified pay-as-you-go billing metered per Oracle CPU-hour. Accelerating hybrid cloud deployments via Oracle Marketplace
As organizations manage expanding hybrid cloud environments, streamlined procurement and foundational consistency are paramount. Customers can now more easily unlock the value of the broader Red Hat portfolio on OCI, providing flexible transactional options across core enterprise platforms. Red Hat Ansible Automation Platform, Red Hat Enterprise Linux, Red Hat OpenShift and Red Hat OpenShift Virtualization subscriptions are now available to purchase via Oracle Marketplace, enabling customers to transact directly through Oracle Marketplace while maximizing their strategic technology investments.
Optimizing interoperability across hybrid cloud environments
In addition to introducing new OCI procurement paths, Red Hat and Oracle continue to advance joint engineering efforts to optimize core product integrations. Key developments across the hybrid cloud portfolio include:
Oracle AI Database on Red Hat Enterprise Linux: Building on a collaboration that spans more than two decades, Oracle AI Database 26ai is fully certified on Red Hat Enterprise Linux 8, 9 and 10. Oracle Real Application Clusters (RAC) and Oracle AI Database on Red Hat OpenShift Virtualization: Oracle RAC on Database 19c and Oracle AI Database 26ai has obtained Red Hat validation for on-premises deployment of OpenShift Virtualization. Oracle WebLogic Server on Red Hat OpenShift Virtualization: Oracle WebLogic Server has been validated by Red Hat to run on Red Hat OpenShift Virtualization, enabling organizations to streamline application modernization while running traditional virtual machines alongside cloud-native containers. Availability
Red Hat Enterprise Linux for OCI is now available as a first-party offering in the OCI Console. Existing bring-your-own-subscription options remain available. Red Hat Ansible Automation Platform, Red Hat Enterprise Linux, Red Hat OpenShift and Red Hat OpenShift Virtualization are now available to purchase via Oracle Marketplace. Customers have the option to use Oracle Universal Credits when purchasing Red Hat Enterprise Linux for OCI or a Red Hat subscription on Oracle Marketplace.
Supporting Quotes
Kevin Kennedy, vice president, Global Partner Ecosystem, Red Hat
“Navigating the complexities of the AI era starts by establishing a strong, flexible open hybrid cloud foundation to drive both stability and speed. Through our expanding collaboration with Oracle, Red Hat Enterprise Linux as a first-party offering on OCI and streamlined procurement via Oracle Marketplace, we’re empowering our joint customers to standardize on a trusted, AI-optimized platform. This will help our customers modernize with confidence, wherever workloads reside.”
Chris Sullivan, vice president, Strategic Partnerships, Oracle
“Our customers want to modernize their critical infrastructure with the reliability, security, and flexibility their businesses demand. Together with Red Hat, we’re making it simpler to buy and run the platforms their teams already rely on—helping them spend less time managing infrastructure and more time delivering value to their customers.”
Additional resources
Learn more about Red Hat Enterprise Linux for OCI Find Red Hat on Oracle Marketplace Explore Red Hat and Oracle’s collaboration Connect with Red Hat
Learn more about Red Hat Get more news in the Red Hat newsroom Read the Red Hat blog Follow Red Hat on X Watch Red Hat videos on YouTube Follow Red Hat on LinkedIn About Red Hat
Red Hat is the open hybrid cloud technology leader, delivering a trusted, consistent and comprehensive foundation for transformative IT innovation and AI applications. Its portfolio of cloud, developer, AI, Linux, automation and application platform technologies enables any application, anywhere—from the datacenter to the edge. As the world's leading provider of enterprise open source software solutions, Red Hat invests in open ecosystems and communities to solve tomorrow's IT challenges. Collaborating with partners and customers, Red Hat helps them build, connect, automate, secure and manage their IT environments, supported by consulting services and award-winning training and certification offerings.
Forward-Looking Statements
Except for the historical information and discussions contained herein, statements contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company’s current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially. Any forward-looking statement in this press release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.
Statements in this article relating to Oracle’s future plans, expectations, beliefs, intentions, and prospects are “forward-looking statements” and are subject to material risks and uncertainties. A detailed discussion of these factors and other risks that affect our business is contained in Oracle’s Securities and Exchange Commission (SEC) filings, including our most recent reports on Form 10-K and Form 10-Q under the heading “Risk Factors.” These filings are available on the SEC’s website or on Oracle’s website at https://oracle.com/investors/ All information in this article is current as of October 2026 and Oracle undertakes no duty to update any statement in light of new information or future events.
Red Hat, Red Hat Enterprise Linux, the Red Hat logo, and OpenShift are trademarks or registered trademarks of Red Hat, LLC or its subsidiaries in the U.S. and other countries. Linux® is the registered trademark of Linus Torvalds in the U.S. and other countries.
Deciding between two enterprise giants requires a look at their different paths toward cloud dominance. Both Microsoft (MSFT +0.84%) and Oracle (ORCL +1.06%) offer compelling software portfolios for long-term investors today.
Microsoft leverages its massive ecosystem ranging from personal computing to enterprise cloud services. Oracle focuses on its specialized database roots while migrating legacy clients to its high-performance infrastructure. These firms compete for the same corporate budgets, but their business models and financial profiles provide unique opportunities for those seeking exposure to the technology sector.
The case for MicrosoftMicrosoft is a powerhouse in the technology landscape due to its diversified portfolio spanning cloud, productivity, and gaming. The company relies on its Azure cloud platform and a strategic partnership with OpenAI to deliver advanced artificial intelligence (AI) tools to a global customer base. It also utilizes a large indirect sales channel of partners and resellers to support the deployment of Windows and Microsoft 365 services.
Trailing-12-month (TTM)revenue reached roughly $332 billion, as of the company's June-ending fiscal year, representing growth of about 18% over the previous year. Net income was approximately $134 billion, representing a stellar net margin of 40%, which measures the percentage of revenue remaining as profit after all expenses are paid.
As of its June 2026 balance sheet, the company reported a debt-to-equity ratio of nearly 0.1x. This ratio, which divides total debt by shareholder equity, indicates a relatively low reliance on borrowed funds. The current ratio stands at roughly 1.2x.
Trailing-12-month (TTM) free cash flow reached approximately $67 billion. Free cash flow is the cash left over after paying for operations and capital expenditures.
The case for OracleOracle has transformed into a cloud-first provider by helping large organizations migrate their critical database workloads to the Oracle Cloud Infrastructure. It continues to serve a massive global customer base in healthcare and financial services through its direct sales teams.
Through the company's August-ending fiscal first quarter of 2027, TTM revenue reached nearly $72 billion -- an increase of about 22% over the previous year. This growth resulted in a net income of roughly $18.7 billion for the period. That's a net margin of about 26%, reflecting its ability to turn a significant portion of its sales into profit.
As of its August 2026 balance sheet, the debt-to-equity ratio is 2.3x, meaning the company uses a high level of debt relative to its equity. The current ratio, which measures short-term liquidity by dividing current assets by current liabilities, is approximately 1.2x.
TTM free cash flow was negative $28 billion, largely due to heavy capital expenditures to expand its global data center network.
Risk profile comparisonMicrosoft faces intense competition from other major hyperscalers, including the cloud leader Amazon, in the AI market. Significant investment risks arise from its large-scale capital expenditures on data centers, which may not yield expected returns if customer demand shifts.
Additionally, the company faces ongoing cybersecurity threats from nation-state actors and evolving global legal scrutiny regarding data privacy and antitrust regulations.
Oracle's business is subject to intense competition from specialized cloud providers and firms such as Salesforce and SAP. The company relies heavily on successfully migrating its existing on-premises customers to the Oracle Cloud to maintain its market share.
Furthermore, Oracle faces risks related to managing its complex global supply chain and potential integration challenges following its large acquisition of Warner Bros. Discovery.
Valuation comparisonMicrosoft currently trades at a significantly higher valuation than Oracle, reflecting its superior cash flow generation and lower debt levels.
MetricMicrosoftOracleForward P/E27.2x16.5xP/S ratio12.0x5.7xValuation metrics include those sourced from Financial Modeling Prep (FMP) and may differ from those of other data providers.
The P/S ratio measures the market value of the company against its sales over the past twelve months. The Forward P/E ratio compares the current stock price to future earnings estimates.
Microsoft is the safer tech stock to buy, given its established relationships with enterprises and consumers that use its software and cloud services. Oracle is a higher-risk bet on the AI data center build-out, but the stock also offers higher upside than Microsoft.
Oracle has a competitive advantage built on its long-standing relationships with enterprises that use its database services. Still, the reason it is a higher-risk bet right now is debt. Its higher debt-to-equity ratio weakens its financial health and turns the stock into a levered play on growing AI demand.
However, Oracle is willing to issue additional debt to finance that build-out because demand is there. In the fiscal first quarter of 2027, its remaining performance obligations, representing contracted revenue from customers, reached $664 billion, up $209 billion over the year-ago quarter.
While analysts expect Microsoft's earnings to grow about 15% annually in the coming years, Oracle is expected to deliver 23% growth. For that higher growth, investors need only pay a forward price-to-earnings ratio of 15x, compared with about 27x for Microsoft.
I think it's unlikely given demand trends, but if anything slowed AI investment or demand for cloud services, Oracle would likely experience a steeper sell-off than Microsoft stock.
That said, I would buy Oracle given its strong competitive position in cloud database services and the stock's more attractive valuation relative to expected growth.
Collaboration to connect AstraZeneca's scientific and therapeutic expertise with Oracle's real-world data, cloud, AI, and clinical capabilities to accelerate clinical research and bring evidence-driven insights into care workflows to help improve patient care
, /PRNewswire/ -- Oracle today announced an agreement with AstraZeneca to explore how AI and real-world data can help clinicians identify eligible patients for clinical trials, accelerate evidence generation, and bring relevant research insights into everyday care. The collaboration is expected to combine AstraZeneca's scientific and therapeutic expertise with Oracle's health data, cloud, AI, analytics, and clinical workflow capabilities.
Through a non-binding agreement, the companies plan to explore selected use cases that could improve clinical-trial efficiency and success by leveraging modern applications and AI to help care teams identify eligible patients earlier and easier, resulting in greater access to clinical trials for patients in need and helping to overcome one of the largest obstacles in clinical trials - patient recruitment. Initial disease areas to be explored could include oncology; cardiovascular, renal and metabolic diseases; respiratory and immunology; and rare diseases.
Pascal Soriot, Chief Executive Officer, AstraZeneca said: "This unique collaboration brings leaders in healthcare and AI together at a global scale to accelerate the journey from the discovery of medicine to patient care. Combining AstraZeneca's world class science with Oracle's deep data and technology expertise, we can help clinicians identify patients sooner, optimize clinical trials, and generate evidence continuously across the lifecycle of a medicine."
"Some of the most important opportunities for AI are in healthcare, where better use of data can help turn scientific innovation into better outcomes for patients," noted Mike Sicilia, chief executive officer, Oracle. "By bringing AstraZeneca's scientific expertise together with Oracle's data, cloud, AI, and healthcare capabilities, we have an opportunity to help accelerate research, connect more patients to clinical trials, and ultimately bring relevant insights into care faster."
Connecting Research and Care
Anne-Claire Gerbaldi, Chief Digital, Data and AI Officer, AstraZeneca, added: "Too many patients are diagnosed late or face a long journey to get the care they need. To build the next decade of medicine, we aim to harness AI to connect learnings across science, clinical trials, and everyday care, generating insights that continuously strengthen research, accelerate innovation, and enhance patient outcomes. Bringing together the unique capabilities of Oracle and AstraZeneca, we believe we can support smarter clinical trials, strengthen safety monitoring, and help ensure patients are diagnosed sooner and receive the right care."
Seema Verma, executive vice president and general manager, Oracle Health and Life Sciences, said: "Healthcare progress depends on shortening the distance between scientific insight and the decisions clinicians make every day. AstraZeneca brings deep scientific and therapeutic expertise, and Oracle will deliver the secure data, cloud, AI, and clinical workflow capabilities. This collaboration has the potential to help health systems identify eligible patients sooner, broaden access to clinical trials, and generate evidence that supports the next decision, all under the governance of the health systems delivering care."
AstraZeneca and Oracle intend to explore a continuous learning model in which insights from clinical research and routine care help inform future study design, safety monitoring, and patient care. The companies plan to establish shared governance, reusable technical components, and agreed outcome measures to assess results and determine whether successful approaches could extend across disease areas and geographies.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit www.oracle.com.
Trademarks
Oracle, Java, MySQL and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company - ushering in the new era of cloud computing.
Collaboration to connect AstraZeneca's scientific and therapeutic expertise with Oracle's real-world data, cloud, AI, and clinical capabilities to accelerate clinical research and bring evidence-driven insights into care workflows to help improve patient care
, /PRNewswire/ -- Oracle today announced an agreement with AstraZeneca to explore how AI and real-world data can help clinicians identify eligible patients for clinical trials, accelerate evidence generation, and bring relevant research insights into everyday care. The collaboration is expected to combine AstraZeneca's scientific and therapeutic expertise with Oracle's health data, cloud, AI, analytics, and clinical workflow capabilities.
Through a non-binding agreement, the companies plan to explore selected use cases that could improve clinical-trial efficiency and success by leveraging modern applications and AI to help care teams identify eligible patients earlier and easier, resulting in greater access to clinical trials for patients in need and helping to overcome one of the largest obstacles in clinical trials - patient recruitment. Initial disease areas to be explored could include oncology; cardiovascular, renal and metabolic diseases; respiratory and immunology; and rare diseases.
Pascal Soriot, Chief Executive Officer, AstraZeneca said: "This unique collaboration brings leaders in healthcare and AI together at a global scale to accelerate the journey from the discovery of medicine to patient care. Combining AstraZeneca's world class science with Oracle's deep data and technology expertise, we can help clinicians identify patients sooner, optimize clinical trials, and generate evidence continuously across the lifecycle of a medicine."
"Some of the most important opportunities for AI are in healthcare, where better use of data can help turn scientific innovation into better outcomes for patients," noted Mike Sicilia, chief executive officer, Oracle. "By bringing AstraZeneca's scientific expertise together with Oracle's data, cloud, AI, and healthcare capabilities, we have an opportunity to help accelerate research, connect more patients to clinical trials, and ultimately bring relevant insights into care faster."
Connecting Research and Care
Anne-Claire Gerbaldi, Chief Digital, Data and AI Officer, AstraZeneca, added: "Too many patients are diagnosed late or face a long journey to get the care they need. To build the next decade of medicine, we aim to harness AI to connect learnings across science, clinical trials, and everyday care, generating insights that continuously strengthen research, accelerate innovation, and enhance patient outcomes. Bringing together the unique capabilities of Oracle and AstraZeneca, we believe we can support smarter clinical trials, strengthen safety monitoring, and help ensure patients are diagnosed sooner and receive the right care."
Seema Verma, executive vice president and general manager, Oracle Health and Life Sciences, said: "Healthcare progress depends on shortening the distance between scientific insight and the decisions clinicians make every day. AstraZeneca brings deep scientific and therapeutic expertise, and Oracle will deliver the secure data, cloud, AI, and clinical workflow capabilities. This collaboration has the potential to help health systems identify eligible patients sooner, broaden access to clinical trials, and generate evidence that supports the next decision, all under the governance of the health systems delivering care."
AstraZeneca and Oracle intend to explore a continuous learning model in which insights from clinical research and routine care help inform future study design, safety monitoring, and patient care. The companies plan to establish shared governance, reusable technical components, and agreed outcome measures to assess results and determine whether successful approaches could extend across disease areas and geographies.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit www.oracle.com.
Trademarks
Oracle, Java, MySQL and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company - ushering in the new era of cloud computing.
View original content to download multimedia:https://www.prnewswire.com/news-releases/oracle-and-astrazeneca-partner-to-advance-ai-enabled-healthcare-innovation-302913441.html
Skončí současný investiční boom zaměřený na umělou inteligenci podobně, jako investiční boom železnic? Podobné otázky si kladou některá média i investoři. Na konkrétnější úrovni přitom hovoříme o tom, jaká je a hlavně bude návratnost investovaného kapitálu. Dnes se z této perspektivy podíváme na hyperscalery, ale i železniční společnosti. Ona je totiž tak trochu otázka i to, jak vlastně „skončil“ onen železniční boom.
U železnic se obvykle pracuje s tím, že docházelo k mohutným investicím, které notně překročily v té době využitelné kapacity. Výsledkem bylo, že řada firem nepokryla svůj náklad kapitálu, nebo přímo zkrachovaly. Ale to samozřejmě není konec příběhu, jen jedné jeho kapitoly. Protože železniční společnosti fungují stále. Jak si vedou?
Union Pacific Corp dosahuje návratnost investovaného kapitálu ROIC mezi 15 – 17 %, což je evidentně vysoko nad návratností požadovanou. Jinak řečeno: To, co na jeden dolar investovaného kapitálu firmy vydělává, je mnohem víc, než co u něj investoři požadují. Norfolk Southern Corp je se svým ROIC u 10 %, což nemusí být výrazně nad požadovanou návratností. Ale nejde o žádný propadák. Canadian Pacific Kansas City Limited je u 6 – 7 %. Takže podle tohoto měřítka vydělává jen něco málo nad bezrizikové sazby. Tedy asi příliš málo.
V USA bylo vrcholu v železničním investičním boomu dosaženo někdy mezi lety 1870 – 1890, ale trval řadu desetiletí a vrcholy a euforii někdy rychle střídaly krachy a panika. Nyní po mnoha desetiletích vidíme, že obrázek je na straně návratnosti kapitálu vlastně stále dost pestrý. Jsou tu společnosti, které si na této (klíčové) rovině vedou hodně dobře. Ale i opaky. Není přitom třeba velké představivosti na vymyšlení scénáře a možností, kdy to s hypercalery, respektive řadou firem v AI byznysu, skončí podobně.
V následujícím grafu pak vidíme návratnost investovaného kapitálu hyperscalerů. Konkrétně to, co vydělají na provozním zisku mínus daně, děleno celkovým investovaným kapitálem – akciovým a dluhovým. Do roku 2022 se tento ROIC pohyboval mezi 30 – 40 %. Což je extrémně vysoké číslo. Jak jsem naznačil výše, pokud bychom mu měli dát tu správnou dimenzi, srovnali bychom jej s návratností požadovanou:
Jako orientační měřítko můžeme vzít požadovanou návratnost u celého trhu. Tedy více než 5 % bezrizikových sazeb a necelá 3 % rizikové prémie (podle odhadů Goldman Sachs). ROIC hyperscalerů je nyní něco nad 20 %. I kdyby jejich rizikovost byla něco nad trhem, stále je ROIC výrazně nad návratností požadovanou. Rizikovost hypercalerů a kvůli jejich podílu na celkové kapitalizaci tedy i rizikovost celého trhu je ale nyní kapitola sama o sobě.
Konec křivky míří dolů a pokud tomu tak bude i nadále, záleží na tom, kde se tento trend zastaví. Pokud nad požadovanou návratností, kapitál se stále „zaplatí“. Každopádně graf spíše podporuje teze o komoditizaci byznysu. A úplné změně podnikatelských modelů řady společností. Které byly ještě nedávno orientovány na vysoce zisková „měkká“ aktiva, ale rychle se z nich stávají méně ziskové (ROIC) firmy stojící na tvrdých/hmotných aktivech. A není překvapivé, že ROIC se u hypersclarů také dost liší: Třeba Microsoft jej má u 30 %, Oracle je u 12 %, Google je za poslední rok na 46 %.
Oracle's cloud revenue is exploding while its stock sits near yearly lows, and the gap between those two realities may represent one of the more unusual setups in large-cap tech right now.
The 24/7 Wall St. price target for Oracle (NYSE:ORCL | ORCL Price Prediction) is $200.70 over the next 12 months. With shares at $133.28 in midday trading, that implies about 50.6% upside. Our model rates Oracle a buy with high confidence.
Metric Value Current Price $133.28 Price Target from 24/7 Wall St. $200.70 Upside/Downside 50.6% Recommendation BUY Confidence Level 90% Oracle’s fundamentals and its share price have diverged. Cloud infrastructure revenue more than doubled last quarter, while the stock has fallen year to date on fears about debt and capital spending.
Our model looks through the financing noise and focuses on earnings power, and that earnings power points sharply higher.
Record Cloud Growth Meets a 30% Share Slide Oracle is down 6.83% over the past week, 7.62% over the past month and 30.71% year to date. It sits well below its 52-week high of $318.28 and closer to its low of $114.08. Weak AI sentiment hit CoreWeave (NASDAQ:CRWV): CoreWeave shares tumbled this week as bond yields climbed on concern about AI borrowing.
Operating results stayed strong. Q1 fiscal 2027 revenue reached $19.345 billion, up 29.6% and ahead of the $19.129 billion consensus. Non-GAAP EPS of $1.92 beat the $1.74 estimate. Cloud infrastructure revenue jumped 121%, and remaining performance obligations (RPO, or signed future revenue) hit $664 billion.
Why Bulls See $322 Within Reach Management guided Q2 cloud revenue growth of 65% to 71% and raised fiscal 2027 targets to at least $90 billion in revenue and $8.10 in non-GAAP EPS. Oracle expects “around half of our RPO to convert into sales over the next 36 months.”
GPU use ran at 97.9%, and renewals were priced at a 20% premium. Of the 43 analysts covering the stock, 7 rate it Strong Buy and 28 rate it Buy. If RPO conversion speeds up, our bull scenario reaches $322.31.
Debt and Capex Are What Could Derail the Rally Q1 capex hit $28.5 billion, drove free cash flow to -$5.40 billion. Full-year capex is guided at $90 billion to $95 billion. Interest expense rose 55% to $1.4 billion, and Oracle plans to raise about $40 billion in debt and equity this fiscal year. Software license revenue also fell 15%.
Cash generation offsets some of that pressure. Operating cash flow soared 184% to $23.10 billion, and the CFO said scaled projects deliver “a free cash flow conversion ratio of something like 100% to post-tax EBITDA.” Even our bear scenario lands at $171.29.
The expansion behind that capex has to be powered, cooled, and networked by someone, and we rounded up seven suppliers riding the same wave in a free report here: 7 Stocks Powering the AI Boom (That Aren’t Chipmakers).
Oracle Trades at a Discount to Microsoft and Amazon Through Azure, Microsoft (NASDAQ:MSFT) competes directly, and it also hosts Oracle’s multicloud database. It trades at 25x forward earnings while growing revenue 17.7%.
Amazon (NASDAQ:AMZN) competes through AWS for the same AI training workloads, at 24x forward earnings with 19.6% revenue growth. Oracle is growing faster than both at a lower multiple. That gap makes our 24/7 Wall St. price target look conservative.
Company Forward P/E Quarterly Revenue Growth (YoY) Oracle 18 29.6% Microsoft 25 17.7% Amazon 24 19.6% Our Verdict: Growth Outweighs the Balance Sheet Risk The 24/7 Wall St. price target of $200.70 comes with a buy rating and 90% confidence. The $664 billion backlog sits behind a stock priced below its hyperscaler peers.
The thesis gets stronger if RPO converts on schedule and capex moves toward customer-funded structures. It weakens if borrowing costs keep climbing or datacenter deliveries slip. For now, our model weighs Oracle’s growth more heavily than its balance sheet risk.
Here is where the 24/7 Wall St. price target model projects Oracle could trade further out if current growth trends and market conditions hold.
Year Price Target from 24/7 Wall St. 2026 $137.77 2027 $201.06 2028 $273.30 2029 $326.69 2030 $388.07 Oracle needs to keep executing on its AI infrastructure strategy for these projections to hold. Faster RPO conversion could raised results well past these figures, while financing pressure or AI demand fatigue could pull them lower.
Contact [email protected] for any questions or corrections.
Oracle (ORCL -4.64%) stock was near $130 as of this writing, about 60% off its record close at $328.33 on Sept. 10, 2025. Shares are down 33% this year, but the S&P 500 (^GSPC -1.09%) returned about 13% through September.
A fall this sharp makes the stock tempting, and on earnings it's arguably cheap.
But I think Oracle's cash flow statement matters more over the next few years. The cloud giant is spending more on its artificial intelligence (AI) build-out than its business takes in, and it plans to spend even more this fiscal year.
My prediction is that Oracle stock trails a fund tracking the S&P 500 from now through 2030.
Image source: The Motley Fool.
The spending is still climbingOracle's spending already topped its cash last fiscal year (the company's fiscal years end May 31). Capital expenditures were $55.7 billion in fiscal 2026, while operating cash flow grew 54% to $32.0 billion. That put free cash flow at negative $23.7 billion.
The pace keeps rising. Quarterly capital expenditures climbed over most of fiscal 2026, from $8.5 billion in the first quarter to $18.6 billion in the third, before slipping to $16.5 billion in the fourth. Then spending surged to $28.5 billion in the fiscal first quarter of 2027 (the quarter ended Aug. 31, 2026), more than triple the year-ago total.
For the full fiscal year, management is still guiding for capital expenditures of $90 billion to $95 billion. Customers will fund part of that up front. Even net of customer prepayments and timing effects, though, Oracle plans to spend as much as $70 billion this fiscal year. On the same basis, it spent around $48 billion in fiscal 2026.
The prepayments didn't close the gap in fiscal Q1, either. Operating cash flow surged 184% year over year to $23.1 billion, lifted by $11.4 billion in customer prepayments. Free cash flow was still negative $5.4 billion, the sixth straight quarter below zero.
When does the cash come back?On Oracle's fiscal Q1 earnings call in September, an analyst asked when the company expects to return to positive free cash flow.
"We have not given a particular time frame on that," chief financial officer Hilary Maxson said. She added that each of Oracle's data center projects "by nature, is a strong free cash flow generating project" once it ramps up.
That could well be right. My worry is how long the ramp takes. Oracle's remaining performance obligations (contracted revenue it hasn't recognized yet) hit $664 billion at the end of fiscal Q1. But the company expects to recognize only around 13% of that in the next 12 months. About half isn't expected to become revenue until after August 2029.
The costs, of course, come sooner. Depreciation was $3.2 billion for fiscal Q1, up from $1.4 billion a year before. And Maxson said in June that gross margin would fall this fiscal year as new data centers ramp toward full revenue.
Shareholders are funding the waitUntil the cash turns, Oracle needs to fill the gap with fresh money. It sold $20 billion in stock under an at-the-market program in fiscal Q1, part of the approximately $40 billion in debt and equity it expects to raise this fiscal year.
Both cost shareholders something. The average number of shares outstanding grew 5% year over year in the quarter. And interest expense climbed 55% to $1.4 billion, mainly because of the $43 billion of bonds Oracle sold in fiscal 2026.
An index fund doesn't need its owners to wait out a build-out like this.
ORCL Oracle$128.23-$6.24 (-4.64%)
NYSE · As of 4:00 PM ET 10/16/26
Sure, Oracle stock looks cheap. Using the $8.10 of non-GAAP (adjusted) earnings per share management expects this fiscal year, Oracle trades at around 16 times earnings, under the S&P 500's forward price-to-earnings ratio of nearly 19 as of Sept. 30.
Management's long-term outlook also calls for earnings per share to compound at 28% a year through fiscal 2030. If Oracle delivers that on schedule, I might be wrong.
But earnings per share isn't cash, and the earnings may keep getting spread over more shares for as long as the gap stays open.
So, will Oracle stock keep up with the index through 2030? I don't think so. The business may well be far bigger by then. But the stock needs to get through years of high spending, new debt, and new shares first, and I think an S&P 500 fund is the better bet over that time.
Investors have good reason to be concerned about Oracle (ORCL -4.64%) stock. The company has borrowed heavily to finance its transformation into an artificial intelligence (AI) cloud stock. Moreover, much of its backlog depends on OpenAI, a company that has not performed to expectations financially.
Despite that concern, investors may take comfort in the company's considerable backlog. Even if OpenAI does not perform to expectations, that backlog could still drive Oracle's growth story, and here's how.
Image source: The Motley Fool.
The state of Oracle today Indeed, Oracle's growth story is likely hiding in the company's $664 billion backlog.
To serve its customers, Oracle has accumulated more than $125 billion in debt to finance the infrastructure needed to meet the demand for its AI cloud services. Since Oracle has a book value of around $67 billion, that debt places significant strain on the company's balance sheet, sparking concern that it could derail its AI cloud ambitions.
Furthermore, yields on some of its corporate bonds have risen above 8%. While that does not compare to the 15% bond yields of a neocloud company like CoreWeave, it has sparked investor concern.
Additionally, nearly half of that is the $300 billion deal it made with OpenAI. Investors have become increasingly skeptical about whether it can afford to honor its agreement with Oracle.
But Oracle has a tremendous backlog without OpenAI. That backlog grew by $209 billion over the previous 12 months, approximately two-thirds the size of its OpenAI deal. Such improvements increase the likelihood that it can monetize its AI investments with or without OpenAI.
Investors can also take comfort in the fact that its revenue for the first quarter of fiscal 2027 (ended Aug. 31) was over $19 billion. That was 30% higher than the year-ago level, and nearly all of that growth came from its cloud segment.
Despite rapidly rising interest expenses, net income in fiscal Q1 was almost $4.8 billion, a 63% yearly increase. Hence, at least for now, the company continues to profit from its AI investments.
Furthermore, it differs from CoreWeave in one key respect. Although an AI downturn would almost certainly bring significant pain, investors should not overlook Oracle's non-cloud segments. Even though they are now slow-growth businesses, they keep the company profitable and could serve as a stabilizing force during a downturn.
ORCL Oracle$128.23-$6.24 (-4.64%)
NYSE · As of 4:00 PM ET 10/16/26
Amid the stock sell-off, its price-to-earnings (P/E) ratio has fallen to just 20. Even though the high debt load may justify the lower valuation, it has maintained an average P/E ratio of 35 over the last five years, implying a discount that more risk-tolerant investors might find attractive.
Oracle stock is probably worth considering for risk-tolerant investors, given the $664 billion backlog.
Admittedly, that backlog does not absolutely guarantee future revenue. Also, its considerable debt has meaningfully strained Oracle's finances.
However, Oracle has a massive backlog even without OpenAI's $300 billion share of that. Moreover, it has a growing cloud business and other segments that are slow-growing but stable.
Finally, Oracle now trades at a low P/E ratio. That arguably makes a strong case for buying the cloud stock and reaping the benefits expected from its backlog.
The artificial intelligence (AI) boom has a bit of a problem: someone has to pay for it. Despite soaring sales, the costs are still far ahead of the revenues, and more and more companies are turning to the debt market to fund the gap and continue the AI build-out.
But as companies borrow more to build their data centers and fill them with advanced chips, investors are getting nervous about when they'll see a return -- or if they will. This week, that fear has shown up in the bond market where yields are spiking, and the cost to insure the debt against default has reached record levels for companies like CoreWeave and Oracle.
CoreWeave's lenders are getting nervousThe turbulence was rough enough for Nvidia CEO Jensen Huang to step in to try to reassure investors, telling investors that CoreWeave's "financial strength is improving every day." Despite his insistence, the company's bond prices have plummeted; some were trading around 80% of face value, firmly in "distressed" territory. Rates are spiking too, with its October 2031 bond yield reaching 16%.
Jensen Huang. Image source: Getty Images.
Perhaps the clearest sign of bond investor unease was the jump in the five- year credit default swaps (CDS) spread -- basically the cost to insure CoreWeave debt against default -- which reached a record high of about 1,195 basis points. In simple terms, that means it would cost an investor $119,500 a year to insure $1 million in CoreWeave debt.
Oracle's borrowing comes under scrutinyWhile CoreWeave took the brunt of it, Oracle (ORCL -4.64%) was not spared either. On Thursday, its five-year CDS spread was nearing 300 basis points, a record for the company.
ORCL Oracle$128.23-$6.24 (-4.64%)
NYSE · As of 4:00 PM ET 10/16/26
Oracle's notes due in November 2032 were yielding 7.24% on Wednesday. This is coming just on the heels of a recent credit rating downgrade from S&P Global, which now rates Oracle just one notch above speculative or "junk" grade.
The unease extends across the AI tradeBonds tied to Meta's Hyperion data-center project have fallen, trading around 91 cents on the dollar and yields reaching as high as 7.55% as of late September. CDS spreads have reached above 100 basis points.
SoftBank, a major backer of OpenAI and other AI ventures, saw its five-year CDS spread climb 24 basis points to 424 on Thursday. SpaceX saw its debt-insurance costs rise sharply during the week too.
Higher rates make the math harderThere are a few things going on here. First, the macro picture is getting harder to ignore. Oil prices continue to climb, adding to already substantial inflation fears. The most recent wholesale price data indicates things are moving in the wrong direction.
This has led to a spike in U.S. Treasury rates, and with the 10-year yielding roughly 5%, companies are forced to offer a considerably higher return to convince investors to take on the added risk.
That's the macro pressure, but the economics of AI itself matter just as much. This is an incredibly capital-intensive business. Companies have to spend enormous sums building and equipping data centers before those facilities bring in any revenue.
And eventually, that revenue has to cover operating costs, interest payments, and the initial investment. It's still not clear that all these projects will generate enough to justify their cost. The longer that uncertainty persists, the more investors are likely to demand in return for lending these companies money.
When investors think about cloud computing, Alphabet (GOOGL -2.47%)(GOOG -2.32%) and Microsoft (MSFT -1.93%) are often the first names that come to mind. But Oracle (ORCL -4.64%) is also making a strong push into AI infrastructure, and its rapidly growing cloud business offers another way to ride the AI boom.
With $5,000 to put to work today, investors may find Oracle a more compelling cloud choice than either of those giants. The reason starts with how fast its cloud business is growing.
Image source: Getty Images.
This database giant is becoming a major force in AI cloud
Oracle may be best known for its database software, which businesses use to store and manage critical information. These days, that established business is laying the foundation for a much bigger opportunity: supplying the cloud infrastructure that other companies need to develop and run AI models.
Oracle's cloud infrastructure business is already seeing solid growth, with revenue climbing 121% to $7.4 billion in its most recent quarter. That suggests its cloud business is becoming an important growth engine rather than simply an extension of its traditional software business.
ORCL Oracle$128.23-$6.24 (-4.64%)
NYSE · As of 4:00 PM ET 10/16/26
Its massive backlog, meanwhile, provides a longer runway for growth. Oracle's remaining performance obligations (RPO) reached a record $664 billion, up $209 billion year over year. RPO represents contracted revenue that has not yet been recognized, giving investors a clearer view of the company's future revenue.
That means Oracle is seeing surging demand from customers that need cloud capacity for AI training, applications, and inference. Still, that demand isn't limited to one type of customer, and Oracle is positioning itself to capture several parts of that market.
But with competition picking up, the next question is how Oracle is setting itself apart from the biggest names in the cloud business.
Oracle has a different advantage from its larger cloud rivals
Microsoft Azure and Alphabet's Google Cloud compete across broad cloud ecosystems. However, Oracle's opportunity is somewhat different: it has the luxury of combining its established database business with cloud infrastructure designed for demanding enterprise workflows.
That matters because companies wouldn't want to rebuild their IT systems every time a new AI model arrives. Oracle's database expertise helps here, allowing companies to integrate AI into the systems and data they already rely on without disrupting operations.
Its multicloud strategy also allows customers to access Oracle database services through major cloud platforms, including Amazon Web Services, Microsoft Azure, and Google Cloud. Instead of requiring customers to migrate everything to Oracle's cloud, it can meet businesses where their existing systems reside.
On top of that, Oracle's established software business provides a source of recurring revenue. Its cloud applications include enterprise resource planning, human resources, and supply chain tools that businesses use to run their daily operations.
That combination of AI-driven growth and recurring software revenue gives the company multiple avenues to expand, which only strengthens the bull case for Oracle.
Still, even a strong bull case needs a reasonable price point and manageable risks.
Is Oracle stock a buy after its recent pullback?
A consensus rating for Oracle among 42 analysts is a strong buy, with target prices indicating between 87% (average) and 206% (highest) upside over the next 12 months. Plus, at about 20 times earnings, Oracle doesn't look too expensive, especially considering its rapid cloud growth.
That said, Oracle is spending heavily to build the data centers needed to serve its customers. And that investment is already weighing on its free cash flow, which means Oracle is spending more than its operations generate. Overspending is a real risk, as the concern is whether Oracle can convert its customer commitments into sufficient revenue to deliver a decent return on those investments.
Looking ahead, if Oracle can turn its massive backlog into lasting profits, today's pullback could be an attractive entry point for long-term investors.
Oracle may not get the same attention as Alphabet or Microsoft, but its growing cloud business and expansion into AI make it worth a closer look. With $5,000, investors can gain meaningful exposure to that opportunity.
In the latest trading session, Oracle (ORCL - Free Report) closed at $128.51, marking a -4.43% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 1.09%. Elsewhere, the Dow lost 0.34%, while the tech-heavy Nasdaq lost 2.15%.
Coming into today, shares of the software maker had lost 10.71% in the past month. In that same time, the Computer and Technology sector gained 1.99%, while the S&P 500 gained 2.44%.
Analysts and investors alike will be keeping a close eye on the performance of Oracle in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $1.88, marking a 16.81% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $21.31 billion, indicating a 32.68% increase compared to the same quarter of the previous year.
ORCL's full-year Zacks Consensus Estimates are calling for earnings of $8.13 per share and revenue of $90.5 billion. These results would represent year-over-year changes of +6.55% and +34.36%, respectively.
It's also important for investors to be aware of any recent modifications to analyst estimates for Oracle. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 1.14% higher. Oracle is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that Oracle has a Forward P/E ratio of 16.55 right now. For comparison, its industry has an average Forward P/E of 16.78, which means Oracle is trading at a discount to the group.
Meanwhile, ORCL's PEG ratio is currently 0.79. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 1.38.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 60, putting it in the top 25% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Bond investors are quietly repricing the debt that funds AI's massive buildout, and some of the numbers coming out of quarterly filings suggest the easy money phase may already be over.
Borrowed money is paying for a growing share of the AI expansion, and credit investors have started to reprice the risk. On the Charles Schwab On Investing episode “Who’s Financing the AI Boom?,” Bryan Whalen described how large the shift has become.
“Last year in 2025, net issuance in the investment grade corporate bond market was about half a trillion dollars. This year it’s expected to double. And almost the entirety of that doubling has been in the AI data center required capital spend,” Whalen said. The portfolio manager also said that the cash buffer is gone: “Three years ago, these hyperscalers had over $250 billion of free cash flow collectively. This year they’re negative.”
Cash Flow Gaps Now Show Up in the Filings
Company results support his point. Meta Platforms (NASDAQ:META | META Price Prediction) generated $784 million of second-quarter free cash flow, down from $8.55 billion a year earlier. Over the same quarter, capex reached $30.12 billion and long-term debt rose to $83.66 billion. Amazon (NASDAQ:AMZN) reported trailing free cash flow of negative $7.6 billion. Oracle (NYSE:ORCL) posted free cash flow of negative $5.4 billion on $28.5 billion of capex and completed a $20 billion at-the-market equity program.
Whalen argued that the biggest spenders care less about the price of borrowing. He said Mark Zuckerberg “does not seem concerned whether he borrows at 6%, 7%, or 8%. It’s not the cost of capital. It’s just getting the capital.”
Nvidia’s Customer Financing Draws Bubble Comparisons
Whalen also turned to chip supplier Nvidia (NASDAQ:NVDA). He said, “Nvidia is financing over 200 different companies that effectively buy their products. That might remind some of us of the technology bubble in the late 90s going into 2000 and 2001.” Nvidia has partnered with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR to mobilize over $500 billion in third-party capital, and its supply obligations reached $279 billion. The company responded to the criticism on its August earnings call: “We recognize the scale of this support, and we know some will call this circular financing. We see it differently.”
CoreWeave Has Become the Market’s Stress Case
Bloomberg Businessweek reported that CoreWeave (NASDAQ:CRWV) carries $52 billion of debt and that interest owed in its latest quarter topped its operating income. The report also cited expectations that the company will need another $20 billion to $40 billion of financing over the next two years. And it said CoreWeave’s 2032 notes were trading 80 cents or below on the dollar with yields at 15%.
CoreWeave’s second-quarter release shows interest expense of $640 million, up from $267 million a year earlier. The company posted an operating loss of $49 million, even with a backlog of about $104 billion. Management guided third-quarter interest expense to $860 million to $940 million. The stock fell 15.9% over the past week.
Supply Contracts and Concentration Add Another Layer of Risk
A discussion on Fast Money questioned how firm long-term chip supply agreements are. It remembered that during COVID, “people wanted to get out of those long term agreements” and added that “those long term agreements are not very solid.” On Mad Money, Jim Cramer tied the giant sell-off in semiconductor stocks to concentration and a lack of diversification.
What Retirement Investors Should Track Next
Three markers matter most:
How much new financing the most leveraged names need, starting with whether CoreWeave’s third-quarter interest bill lands inside its guidance.
How bond investors price that debt. The 10-year Treasury yield was at 5.1% on October 15, and that rate is the benchmark new corporate debt prices against.
How concentrated your own portfolio is, since broad index funds often hold the same AI-linked stocks.
Whalen said he remains cautious on corporate bonds until a better entry point emerges.
Contact [email protected] for any questions or corrections.
AI infrastructure spending has been booming over the past couple of years, and the biggest question for tech sector investors isn't how much revenue these companies you hear about have booked, but who bears the risk while they borrow billions.
Oracle (ORCL -4.27%) closed the first quarter of its fiscal 2027 with $664 billion in remaining performance obligations (RPO), a backlog bigger than its own market cap. It also had $1.4 billion in interest expenses that quarter as its total notes payable and other borrowings reached $125.3 billion.
A backlog larger than the whole company and a debt bill growing faster than revenue point to the real question behind every AI infrastructure stock: When a company signs a 15-year contract to build data centers for a hyperscaler, who's fronting the cash to pour the concrete, and what happens if the contract pays out slower than planned?
The AI build-out has split the companies financing it into two camps. One group is borrowing against decades of cash flow and established business lines with broad customer bases. The other is borrowing against contracts that didn't exist 18 months ago, and the debt is often collateralized by the GPUs and data centers themselves.
ORCL Oracle$128.73-$5.74 (-4.27%)
NYSE · As of 1:52 PM ET 10/16/26
Borrowing against decades of cash flow Oracle is using its long-established enterprise software business as collateral for its AI bet. Its RPO grew on multiyear cloud deals with OpenAI and other AI labs, and the company now borrows tens of billions of dollars a year to build capacity.
Its interest expense grew more than 50% year over year, and spending is outpacing cash inflows: Oracle generated $23.1 billion in operating cash flow last quarter, but capital expenditures of $28.5 billion to build AI data center capacity left it free-cash-flow negative, per Business Insider. The honest risk isn't solvency. It's execution. Oracle has acknowledged that much of its $664 billion backlog won't convert into revenue for years; shareholders are betting it can deliver the capacity before the market's patience runs out.
Image source: Getty Images.
Borrowing against contracts, concentrated in a few hands Neoclouds CoreWeave (CRWV -11.57%) and Nebius (NBIS -11.04%) built their substantial backlogs almost from scratch over the past two years, largely by signing deals with a handful of very large customers. CoreWeave's revenue backlog reached $104 billion last quarter, built on commitments from Microsoft (MSFT -2.22%), OpenAI, and Nvidia (NVDA -0.84%).
But Microsoft alone accounted for roughly 67% of CoreWeave's 2025 revenue, and as of June 30, CoreWeave carried $35.1 billion in total debt, including $3.7 billion in non-recourse debt secured directly against GPU collateral. If a major customer renegotiates, lenders holding that collateral get paid before shareholders see anything.
Nebius shows a similar pattern with a sturdier cushion. Its RPO stood at $33.6 billion in the first quarter, with management citing more than $40 billion in additional contracted revenue from investment-grade customers such as Microsoft.
For both, the contracts are real and typically take-or-pay. The risk is that a handful of hyperscalers now hold outsize leverage over smaller providers that are dependent on them for most of their revenue.
Beware, though: Both tickers have been selling off in recent days as investors focus on their high‑leverage, debt‑funded build-outs, and rising financing costs.
Borrowing against the data centers themselves Applied Digital (APLD -9.86%) and Iren (IREN -9.53%) both pivoted from crypto mining into leasing data center capacity to AI hyperscalers, financed heavily through non-recourse debt tied to their physical assets. Applied Digital has built roughly $36.2 billion in contracted revenue over 15-year base lease terms, structured as take-or-pay, non-cancellable agreements with CoreWeave and investment-grade hyperscalers. Long-term debt climbed from roughly $5 billion to $6.3 billion in a single quarter this year, per Reuters. For a company with a market cap under $7 billion, this is significant leverage, even with billions in leasebacks backing it.
Iren signed a roughly $9.7 billion, five-year contract with Microsoft for GPU capacity at its facility in Texas, plus a $3.4 billion arrangement with Nvidia. It has financed its data center build-out partly through investment-grade-rated, non-recourse GPU financing and convertible notes, a structure that protects Iren's broader balance sheet if one deployment goes wrong. For its fiscal 2027, which began in July, it's guiding for $25 billion to $30 billion in capital spending. All of this points to the need for lots of external capital for success.
So are these companies buys? So, what does all this mean for people who own these tickers or are considering buying them? In short, there's no reason to dismiss these companies' backlogs. The compute capacity shortage in AI is real, and hyperscalers don't sign contracts this large casually or without full intent to execute on them. But booked revenue isn't cash, and where these five companies differ is in how they are financing the gap.
Oracle has its database and applications businesses to fall back on. CoreWeave and Nebius have binding contracts, but their small customer bases leave them exposed if even one major buyer renegotiates. Applied Digital and Iren built their backlogs rapidly, borrowing against the data centers and GPUs they need to deliver.
A $1,000 investment in Oracle (ORCL +3.00%) could grow to roughly $2,430 by 2029. This assumes that the company converts its cloud backlog on the schedule management has outlined, it meets Wall Street's fiscal 2029 average per-share earnings estimate of $15.80, and the stock continues to trade at a recent 20 price-to-earnings (P/E) multiple.
Oracle's remaining performance obligations (RPO) stood at $664 billion as of fiscal first-quarter 2027 ended Aug. 31. That's an increase of $209 billion from a year earlier.
Delays in bringing more cloud capacity online are a risk that could throw off Wall Street's estimates. Still, Oracle's RPO is contracted revenue, providing line of sight into future revenue at a time when demand for AI infrastructure continues to outpace available capacity across the industry.
Image source: Getty Images.
Oracle expects half the backlog to convert to revenue in the next 36 months Oracle provides cloud infrastructure services for artificial intelligence (AI) workloads, Fusion applications that run core business processes, and the Oracle Database. This combination of infrastructure, applications, and AI solutions differentiates Oracle from competitors and continues to drive strong demand from enterprises.
Cloud infrastructure revenue reached $7.4 billion in the first quarter of fiscal 2027, up 121% year over year. RPO rose $26 billion from the prior quarter, and management expects roughly half of the total backlog to convert into sales during the next 36 months.
ORCL Oracle$134.47+$3.92 (+3.00%)
NYSE · As of 4:00 PM ET 10/15/26
Company projections for the full fiscal year call for total revenue of at least $90 billion and non-GAAP (meaning not in accordance with generally accepted accounting principles) earnings per share of $8.10. Demand is not letting up. Graphics processing unit (GPU) utilization stood at 97.9% in the quarter, reflecting that nearly every chip is being used by customers for AI workloads, and capacity that came up for renewal was renewed or resold at a 20% premium to prior contracts.
Synergy Research Group has reported that generative AI-specific cloud services grew 165% year over year in recent periods, with Oracle among the fastest-growing providers outside the top three (Amazon, Microsoft, and Alphabet's Google). Goldman Sachs projects that the five largest U.S. hyperscalers, including Oracle, will spend about $1.2 trillion on AI infrastructure in 2027.
Delays in bringing more capacity online are a risk Investors might think that a 20 P/E for a cloud provider with this much demand appears too low. But the low valuation reflects concerns about the long-term payoff from higher capital spending, particularly with the company's free cash flow under pressure right now.
Oracle expects capital expenditures of $90 billion to $95 billion for fiscal 2027, with net cash capital expenditures of $70 billion or less after customer prepayments and similar financing agreements. This approach of using prepayments and customer-funded hardware takes a lot of the burden off Oracle in raising capital. Still, free cash flow was negative $5 billion in the latest quarter as it continued to spend aggressively to bring more capacity online.
A large portion of the backlog is concentrated with a handful of customers, and any delay in bringing data-center capacity online could slow the conversion of the backlog into revenue. If Oracle fails to convert its backlog into additional revenue and misses Wall Street's earnings estimates, the upside could be limited.
Still, Oracle's infrastructure growth has accelerated for several quarters, GPU utilization remains high, and the company has already shown it can renew older capacity at a premium. If the backlog converts on the 36-month schedule management has described, and the stock is still trading at today's valuation on future earnings, the shares could reach $316 in three years. At the Oct. 14 close of $130, a $1,000 investment would be worth roughly $2,430.
Listen to the audio version of this article (generated by AI).
There was a time you could only buy a house the hard way: with the full price in cash.
Homeownership belonged to people who already had money. Then banks learned they could treat a house itself as collateral, lend against it, and collect over 30 years. And suddenly, the biggest asset most families would ever own became financeable. The housing market we know today isn’t a product of lumber and land but of lending.
Wall Street is now running the same play on a new asset: AI hardware.
SpaceX (SPCX) is reportedly in talks for a $40 billion debt package to buy Nvidia (NVDA) chips – roughly $10 billion in bank loans and $30 billion in investment-grade debt. The discussions are preliminary and could still fall apart. But the sheer size of the ask rattled credit markets: SpaceX’s credit-default-swap spreads and bond risk premiums jumped on the news.
But SpaceX is one borrower in what’s quickly becoming a crowd. Broadcom (AVGO) is supposedly lining up more than $50 billion – with Apollo and Blackstone among the prospective lenders – to finance OpenAI’s custom chip buildout. Oracle (ORCL) is seeking outside capital for chip purchases. And CoreWeave (CRWV) – which had piled up about $52 billion in debt and lease obligations by June – is pursuing investment-grade ratings specifically so it can tap what one of its founders described as the nearly ‘unlimited’ capital held by life insurers.
The AI boom has outgrown the cash sitting on Big Tech’s balance sheets. So the financial system is building a new market around it.
That could matter almost as much as the chips themselves.
The AI Buildout Is Outgrowing the Cash-Funded Model
Every transformative buildout in history has hit the same wall: eventually, the project grows bigger than its builders’ wallets. What carries it over, every time, is fresh financial plumbing.
Railroads didn’t blanket the continent on railroad-company profits; they ran on railroad bonds. Homeownership spread on mortgages, not savings. Power plants, pipelines, and toll roads got their own mechanism – project finance – where lenders underwrite the asset and its contracted cash flows rather than the company that owns it.
AI compute is crossing that threshold right now. GPU-backed loans. Special-purpose vehicles. Residual-value guarantees. Private-credit packages. Insurer-funded, investment-grade debt. Piece by piece, Wall Street is learning to value the hardware, underwrite the contracts behind it, and finance the facilities around it.
Once Wall Street figures out how to lend against something, a whole lot more of that something gets built.
How AI Infrastructure Financing Turns Debt Into Purchase Orders
Underneath all that financial engineering, the money moves in a loop:
Banks, insurers, and private-credit funds put up the capital.
The operator – a SpaceX, a CoreWeave, an Oracle – buys chips and builds capacity.
Long-term customer contracts for that capacity support the debt.
And the suppliers – Nvidia, Broadcom, the memory makers, the networking vendors, the power-equipment companies – get paid up front, while the operator spends years working to earn an adequate return.
That fourth step is where the entire investment case lives: the borrowers carry the financing and utilization risk. The suppliers collect the orders first.
I’ll be honest about the risk side of this. Debt converts flexible spending into fixed obligations, and those widening SpaceX credit spreads are the market pricing exactly that. If AI capacity ultimately fails to generate the cash flows these loans assume, the pain won’t stay contained to the borrowers – it would eventually reach suppliers through weaker future orders.
But it’s a future risk, and the demand keeps pushing it further out. CoreWeave says most of its capacity is already sold through 2027. The contracts supporting these debt packages are being signed by customers who can’t get enough compute today. For now – and likely for years – the machine keeps converting borrowed money into purchase orders.
4 AI Infrastructure Stocks That Get Paid First
I’d keep the basket tight:
Nvidia is the most direct beneficiary. Every one of these financing packages is a mechanism for turning someone else’s borrowed billions into Nvidia revenue. If SpaceX raises $40 billion for chips, Nvidia doesn’t carry the loan. It just books the sale.
Broadcom gets paid twice: once on custom accelerators as more operators design their own silicon, then again on the networking that stitches all those financed chips into working clusters.
Vertiv (VRT) turns chips into running systems. Every borrowed dollar that becomes a GPU still needs power delivery and cooling wrapped around it – and Vertiv sells both.
Quanta Services (PWR) is where the money lands last and longest. Financed data centers eventually need substations, transmission, and grid connections, and Quanta’s $53 billion-plus backlog says that work is already arriving.
Apollo, Blackstone, KKR, and other alternative-asset managers are deeply involved in this ecosystem, too. But suppliers get paid first, in cash, regardless of how any individual loan performs.
The Bottom Line: Wall Street Is Becoming Part of the AI Supply Chain
A year ago, the question hanging over the AI trade was whether the spending could continue once the hyperscalers’ cash got tight.
We’re now learning that the buildout no longer has to rely on corporate cash alone. Wall Street is building the mortgage market that lets the buildout keep compounding, with insurers, banks, and private credit all learning to lend against chips and contracts.
Railroads got bonds. Houses got mortgages. AI is getting its own financing machinery – and once it exists, it doesn’t finance small plans.
That’s exactly why I keep pointing readers toward XPANSE.
Once the financing ecosystem exists, the capital goes hunting for the biggest project it can fund. I believe that project is the one Elon Musk is assembling across AI, robotics, energy, and space – what I call XPANSE. And the window where you can position before those dollars start moving is exactly the window we’re in now.
My free briefing gives you the full thesis, the three steps to take now, and the name and ticker of my favorite stock to play it.
In every lending boom, the safest seat belongs to whoever gets paid in cash, up front. These are the companies in that seat.
Watch the briefing and learn all about that free pick now.
Krilogy Financial LLC grew its position in Oracle Corporation (NYSE:ORCL – Free Report) by 70.8% in the 3rd quarter, according to its most recent filing with the SEC. The firm owned 31,241 shares of the enterprise software provider’s stock after buying an additional 12,951 shares during the period. Krilogy Financial LLC’s holdings in Oracle were worth $4,292,000 at the end of the most recent reporting period.
A number of other institutional investors and hedge funds also recently made changes to their positions in the company. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC raised its holdings in Oracle by 0.8% during the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 14,680,278 shares of the enterprise software provider’s stock worth $2,151,395,000 after purchasing an additional 123,294 shares during the last quarter. Janus Henderson Group PLC lifted its position in Oracle by 8.6% during the 4th quarter. Janus Henderson Group PLC now owns 14,539,366 shares of the enterprise software provider’s stock valued at $2,815,242,000 after purchasing an additional 1,148,698 shares during the period. Bank of New York Mellon Corp boosted its stake in shares of Oracle by 3.0% in the 1st quarter. Bank of New York Mellon Corp now owns 13,251,059 shares of the enterprise software provider’s stock valued at $1,949,363,000 after purchasing an additional 384,984 shares during the last quarter. Amundi boosted its stake in shares of Oracle by 1.5% in the 2nd quarter. Amundi now owns 9,878,184 shares of the enterprise software provider’s stock valued at $1,447,648,000 after purchasing an additional 144,087 shares during the last quarter. Finally, Dimensional Fund Advisors LP boosted its stake in shares of Oracle by 1.7% in the 1st quarter. Dimensional Fund Advisors LP now owns 8,586,492 shares of the enterprise software provider’s stock valued at $1,262,827,000 after purchasing an additional 147,048 shares during the last quarter. Institutional investors own 42.44% of the company’s stock.
Oracle Trading Down 8.8% NYSE:ORCL opened at $130.60 on Thursday. The company has a current ratio of 1.17, a quick ratio of 1.17 and a debt-to-equity ratio of 1.89. Oracle Corporation has a 1-year low of $114.50 and a 1-year high of $322.54. The firm has a market capitalization of $394.90 billion, a price-to-earnings ratio of 21.06, a PEG ratio of 1.01 and a beta of 1.78. The business’s 50-day moving average price is $145.93 and its two-hundred day moving average price is $158.89.
Oracle (NYSE:ORCL – Get Free Report) last posted its earnings results on Thursday, September 10th. The enterprise software provider reported $1.92 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.74 by $0.18. The company had revenue of $19.34 billion during the quarter, compared to analyst estimates of $19.13 billion. Oracle had a return on equity of 48.85% and a net margin of 26.36%. The company’s revenue for the quarter was up 29.6% compared to the same quarter last year. During the same period in the previous year, the company earned $1.47 EPS. Oracle has set its Q2 2027 guidance at 1.850-1.930 EPS and its FY 2027 guidance at 8.100-8.100 EPS. On average, equities analysts expect that Oracle Corporation will post 6.73 earnings per share for the current year. Oracle Dividend Announcement The company also recently declared a quarterly dividend, which will be paid on Friday, October 23rd. Investors of record on Friday, October 9th will be given a $0.50 dividend. This represents a $2.00 dividend on an annualized basis and a dividend yield of 1.5%. The ex-dividend date is Friday, October 9th. Oracle’s dividend payout ratio (DPR) is currently 31.35%.
Insider Buying and Selling In related news, EVP Maria Smith sold 2,631 shares of the business’s stock in a transaction that occurred on Tuesday, September 22nd. The shares were sold at an average price of $151.70, for a total transaction of $399,122.70. Following the completion of the transaction, the executive vice president owned 64,357 shares in the company, valued at approximately $9,762,956.90. The trade was a 3.93% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Stephen Rusckowski acquired 25,000 shares of the firm’s stock in a transaction that occurred on Tuesday, September 29th. The shares were purchased at an average price of $139.35 per share, with a total value of $3,483,750.00. Following the acquisition, the director owned 25,390 shares of the company’s stock, valued at approximately $3,538,096.50. This trade represents a 6,410.26% increase in their position. The SEC filing for this purchase provides additional information. Insiders have sold 36,075 shares of company stock valued at $5,342,123 in the last 90 days. 38.40% of the stock is owned by insiders.
Oracle News Summary Here are the key news stories impacting Oracle this week:
Positive Sentiment: Analyst support remains strong: Mizuho reaffirmed its “Outperform” rating and $320 price target, while other analysts maintained bullish views. Oracle’s $664 billion remaining performance obligations and expected cloud growth continue to support the long-term investment case. Wall Street analyst updates Oracle stock price target Positive Sentiment: Project Jupiter is progressing: Oracle proposed an electricity agreement with El Paso Electric and reaffirmed Bloom Energy’s role in powering the New Mexico AI data center campus. If completed, the project could support future cloud capacity and AI-related revenue. Why is Oracle stock gaining 4% today? Neutral Sentiment: Pipeline approval remains unresolved: Oracle urged federal regulators to expedite approval of a 17.8-mile natural-gas pipeline needed for Project Jupiter. Delays could postpone the data center’s launch, although approval would remove a significant execution bottleneck. Oracle urges FERC to expedite New Mexico gas pipeline for Project Jupiter Negative Sentiment: Hotter inflation pushed Treasury yields higher: September inflation data revived expectations for higher-for-longer interest rates, weighing on technology and AI stocks. Higher yields reduce the appeal of growth equities and raise Oracle’s financing costs. Stock Market Today, Oct. 14: Oracle Tumbles on Hotter CPI Data Lifting Treasury Yields Negative Sentiment: Investors are questioning AI spending and balance-sheet risk: Oracle’s heavy capital expenditures have pushed free cash flow into negative territory, while a broader sell-off in AI infrastructure stocks—particularly after concerns about CoreWeave’s debt—raised worries about Oracle’s returns on costly data-center expansion. Will Rising Capex Weigh on Oracle’s Free Cash Flow Outlook? Analyst Ratings Changes Several equities research analysts have recently commented on the stock. Stephens reiterated an “equal weight” rating and set a $175.00 price target on shares of Oracle in a research report on Friday, September 11th. DZ Bank restated a “buy” rating on shares of Oracle in a report on Thursday, September 17th. CLSA assumed coverage on shares of Oracle in a report on Monday, July 20th. They issued a “hold” rating and a $145.00 price objective on the stock. Oppenheimer reaffirmed an “outperform” rating and issued a $275.00 price objective (up from $235.00) on shares of Oracle in a research note on Tuesday, September 8th. Finally, BMO Capital Markets lowered their target price on shares of Oracle from $220.00 to $195.00 and set an “outperform” rating for the company in a report on Friday, September 11th. One research analyst has rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating, nine have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $251.72.
Check Out Our Latest Stock Analysis on Oracle
Oracle Company Profile (Free Report)
Oracle Corporation (NYSE: ORCL) is a global technology company that develops enterprise software, cloud services and related hardware. Its offerings help businesses manage databases, applications, data, infrastructure and other core information-technology operations.
The company is best known for its Oracle Database, along with cloud-based infrastructure and platform services. Oracle also provides enterprise applications for functions such as finance, human resources, supply-chain management, customer experience and industry-specific operations.
Recommended Stories Five stocks we like better than Oracle Tesla Wants to Make Its Own Chips—What Could Go Wrong? IREN Limited’s AI Pivot Gains Traction—But Can Its Data Centers Deliver? PBF Energy’s Stunning Rally Faces a Critical Test Citi Stock Falls Despite Earnings Beat: What Investors Need to Know Want to see what other hedge funds are holding ORCL? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Oracle Corporation (NYSE:ORCL – Free Report).
Receive News & Ratings for Oracle Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Oracle and related companies with MarketBeat.com's FREE daily email newsletter.
Oracle (ORCL -8.83%), an enterprise cloud software and database platform provider, closed at $130.55, down 8.83%. Oracle fell on Wednesday after hotter-than-expected September Consumer Price Index (CPI) data lifted Treasury yields and revived rate-hike bets. Investors are also watching AI cloud expansion costs and the next earnings update on December 14, 2026.
Trading volume reached 50.4 million shares, coming in about 61% above its three-month average of 31.3 million shares.
How the markets moved todayS&P 500 (SNPINDEX: ^GSPC) closed at 7,721, down 1.08%, while the Nasdaq Composite (NASDAQINDEX: ^IXIC) finished at 26,693, down 1.88%. Among enterprise software, cloud infrastructure, and database management peers, Salesforce (CRM -0.87%) closed at $236.00, down 0.84%, while SAP (SAP +0.34%) closed at $220.40, up 0.30%.
What this means for investorsOracle shares were already under pressure from financing and execution worries around AI cloud expansion, including its Project Jupiter data center, which is pending government approvals, and power logistics costs. The company's spending on AI infrastructure has resulted in its debt heading toward $167 billion, and a revenue timing gap before OpenAI-related contract revenue starts in 2027. As a result, Oracle's credit rating was downgraded to BBB-, one notch above speculative grade.
The CPI data pointing to elevated inflation suggests more federal rate increases could come, making Oracle's growing debt load and shrinking free cash flow a risk for investors. One outcome of the situation could be that Oracle has to cut its dividend.
That said, in September, Oracle reported outstanding revenue growth of 30% year over year to $19.3 billion for its 2027 fiscal first quarter, ended Aug.31. The increase was driven by triple-digit cloud infrastructure gains, so investors are now weighing that momentum against heavier spending. Oracle's next earnings announcement on December 14 will be the clearest test of whether cloud demand can offset margin pressure and borrowing needs.
Robert Izquierdo has positions in Oracle and Salesforce. The Motley Fool has positions in and recommends Oracle and Salesforce. The Motley Fool recommends SAP. The Motley Fool has a disclosure policy.
