Oracle Shares Plummet Despite Strong Growth and Backlog
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy ORCL?
Source: Fool
- Accelerating Growth: Oracle's fiscal Q3 total revenue reached $17.2 billion, marking a 22% year-over-year increase, a significant acceleration from the 14% growth in Q2, indicating robust performance in its cloud business despite the stock's decline.
- Strong Cloud Infrastructure: Cloud infrastructure revenue soared to $4.9 billion, up 84% year-over-year, accelerating from 68% growth in the previous quarter, underscoring Oracle's critical position in the rapidly evolving AI market with substantial future growth potential.
- Massive Backlog: The company's remaining performance obligations (RPO) skyrocketed to $553 billion, a 325% year-over-year increase, primarily driven by large-scale AI contracts, with customer prepayment structures significantly reducing Oracle's financial burden for infrastructure expansion.
- Attractive Valuation for Investors: Although management anticipates capital expenditures of $50 billion for fiscal 2026, raising investor concerns about financial health, Oracle's forward P/E ratio of about 19 is below the market average, suggesting the stock may be undervalued, making it an appealing option for long-term investors.
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Analyst Views on ORCL
Wall Street analysts forecast ORCL stock price to rise
34 Analyst Rating
25 Buy
9 Hold
0 Sell
Moderate Buy
Current: 155.520
Low
180.00
Averages
309.59
High
400.00
Current: 155.520
Low
180.00
Averages
309.59
High
400.00
About ORCL
Oracle Corporation offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. The Company operates through three businesses: cloud and license, hardware and service. Its cloud and license business is engaged in the sale, marketing and delivery of its enterprise applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings, and its cloud license and on-premise license offerings. Its hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Its services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Oracle's Earnings Beat Expectations, Stock Rebounds
- Strong Earnings Report: Oracle's fiscal Q3 2026 revenue surged 22% year-over-year to $17.2 billion, exceeding Wall Street's estimate of $16.9 billion, indicating robust performance in the AI sector that is expected to drive future growth.
- Cloud Infrastructure Growth: The cloud infrastructure segment saw an impressive 84% year-over-year revenue increase to $4.9 billion, significantly surpassing market expectations, highlighting Oracle's competitive edge in the AI workload market and its substantial future growth potential.
- Significant Contract Growth: Remaining performance obligations (RPO) skyrocketed 325% year-over-year to $553 billion, reflecting a strong future revenue pipeline as more companies opt to run AI workloads on Oracle's cloud platform.
- Increased Capital Expenditure: Despite a 269% rise in capital expenditures to $8.5 billion, Oracle anticipates a 24% increase in earnings this fiscal year to $7.45 per share, demonstrating that its investments in AI data centers are set to lay a solid foundation for long-term growth.
See More
Oracle Shares Plummet Despite Strong Growth and Backlog
- Accelerating Growth: Oracle's fiscal Q3 total revenue reached $17.2 billion, marking a 22% year-over-year increase, a significant acceleration from the 14% growth in Q2, indicating robust performance in its cloud business despite the stock's decline.
- Strong Cloud Infrastructure: Cloud infrastructure revenue soared to $4.9 billion, up 84% year-over-year, accelerating from 68% growth in the previous quarter, underscoring Oracle's critical position in the rapidly evolving AI market with substantial future growth potential.
- Massive Backlog: The company's remaining performance obligations (RPO) skyrocketed to $553 billion, a 325% year-over-year increase, primarily driven by large-scale AI contracts, with customer prepayment structures significantly reducing Oracle's financial burden for infrastructure expansion.
- Attractive Valuation for Investors: Although management anticipates capital expenditures of $50 billion for fiscal 2026, raising investor concerns about financial health, Oracle's forward P/E ratio of about 19 is below the market average, suggesting the stock may be undervalued, making it an appealing option for long-term investors.
See More
Oracle Reports 22% Revenue Growth in Q3 Amidst Stock Decline
- Significant Revenue Growth: Oracle's total revenue for the third quarter reached $17.2 billion, marking a 22% year-over-year increase, which is a notable acceleration from the 14% growth seen in Q2, indicating robust performance in its cloud business.
- Strong Cloud Infrastructure: The cloud infrastructure revenue soared to $4.9 billion, up 84% year-over-year, significantly surpassing the previous quarter's 68% growth, reflecting a sustained demand for Oracle's cloud services in the market.
- Massive Future Business Pipeline: The company's remaining performance obligations (RPO) skyrocketed to $553 billion, a 325% year-over-year increase, primarily driven by large-scale AI contracts, showcasing Oracle's strong competitive position in the AI sector.
- Capital Expenditure Concerns: Despite the projected $50 billion capital expenditure for fiscal 2026 to support AI demand raising investor concerns about financial stability, Oracle's stock trades at a forward P/E ratio of about 19, which is below the market average, suggesting potential undervaluation amidst these risks.
See More
US Stocks Decline Amid Iran War Concerns
- Market Pressure Intensifies: The S&P 500 index fell by 0.37%, and the Nasdaq 100 dropped to a 3.75-month low as rising bond yields raised inflation concerns, indicating a pessimistic outlook for future economic conditions.
- Surging Energy Prices: The IEA reported that the Iran war is disrupting 7.5 million barrels per day of global oil supply, and the closure of the Strait of Hormuz has obstructed about one-fifth of the world's oil flow, potentially pushing crude prices above the 2008 record high of nearly $150 per barrel.
- Fed Policy Expectations: The market is pricing in only a 10% chance of a 25 basis point rate hike by the Fed at the April meeting, reflecting investor concerns over slowing economic growth, which could influence future monetary policy directions.
- Tech Stocks Decline: The
See More
Oracle's AI Infrastructure Strategy Pays Off
- Cloud Infrastructure Growth: Oracle's cloud infrastructure business achieved an 84% year-over-year growth, reaching $4.9 billion, reflecting strong demand for AI workload cloud computing and further solidifying its market position.
- Significant Backlog: Oracle's remaining performance obligations (RPO) surged 325% year-over-year to $553 billion, indicating the company's robust potential for future revenue growth, despite current funding pressures.
- Financing Strategy Adjustment: The company plans to raise $50 billion through convertible preferred stock and bonds, having already secured $30 billion, which, while impacting cash flow, is sufficient to support its infrastructure expansion.
- Future Revenue Expectations: Oracle anticipates revenue of $67 billion for fiscal 2026 and has raised its fiscal 2027 revenue forecast to $90 billion, indicating significant growth potential over the next two years amid surging demand for AI computing.
See More
Trump Administration Unveils National AI Policy Framework
- Framework Announcement: On July 23, 2025, the Trump administration unveiled a national policy framework for artificial intelligence in Washington D.C., aiming to establish uniform safety and security measures for emerging technologies while preventing states from enacting their own AI regulations, ensuring nationwide regulatory consistency.
- Six Regulatory Proposals: The framework outlines six key regulatory measures, including implementing child safety rules and standardizing permitting and energy use for AI data centers, designed to enhance the safety of AI products and infrastructure while protecting lawful political expression and dissent rights.
- Congressional Collaboration Plan: The White House aims to work with Congress in the coming months to convert this framework into law, anticipating bipartisan support, although pushing this process faces challenges in a divided Congress, especially with Trump prioritizing other legislative efforts.
- Industry Opposition: AI industry leaders have strongly opposed state-level legislation, arguing that a
See More
Oracle's Earnings Beat Expectations, Stock Rebounds
- Strong Earnings Report: Oracle's fiscal Q3 2026 revenue surged 22% year-over-year to $17.2 billion, exceeding Wall Street's estimate of $16.9 billion, indicating robust performance in the AI sector that is expected to drive future growth.
- Cloud Infrastructure Growth: The cloud infrastructure segment saw an impressive 84% year-over-year revenue increase to $4.9 billion, significantly surpassing market expectations, highlighting Oracle's competitive edge in the AI workload market and its substantial future growth potential.
- Significant Contract Growth: Remaining performance obligations (RPO) skyrocketed 325% year-over-year to $553 billion, reflecting a strong future revenue pipeline as more companies opt to run AI workloads on Oracle's cloud platform.
- Increased Capital Expenditure: Despite a 269% rise in capital expenditures to $8.5 billion, Oracle anticipates a 24% increase in earnings this fiscal year to $7.45 per share, demonstrating that its investments in AI data centers are set to lay a solid foundation for long-term growth.
See More
Oracle Shares Plummet Despite Strong Growth and Backlog
- Accelerating Growth: Oracle's fiscal Q3 total revenue reached $17.2 billion, marking a 22% year-over-year increase, a significant acceleration from the 14% growth in Q2, indicating robust performance in its cloud business despite the stock's decline.
- Strong Cloud Infrastructure: Cloud infrastructure revenue soared to $4.9 billion, up 84% year-over-year, accelerating from 68% growth in the previous quarter, underscoring Oracle's critical position in the rapidly evolving AI market with substantial future growth potential.
- Massive Backlog: The company's remaining performance obligations (RPO) skyrocketed to $553 billion, a 325% year-over-year increase, primarily driven by large-scale AI contracts, with customer prepayment structures significantly reducing Oracle's financial burden for infrastructure expansion.
- Attractive Valuation for Investors: Although management anticipates capital expenditures of $50 billion for fiscal 2026, raising investor concerns about financial health, Oracle's forward P/E ratio of about 19 is below the market average, suggesting the stock may be undervalued, making it an appealing option for long-term investors.
See More
Oracle Reports 22% Revenue Growth in Q3 Amidst Stock Decline
- Significant Revenue Growth: Oracle's total revenue for the third quarter reached $17.2 billion, marking a 22% year-over-year increase, which is a notable acceleration from the 14% growth seen in Q2, indicating robust performance in its cloud business.
- Strong Cloud Infrastructure: The cloud infrastructure revenue soared to $4.9 billion, up 84% year-over-year, significantly surpassing the previous quarter's 68% growth, reflecting a sustained demand for Oracle's cloud services in the market.
- Massive Future Business Pipeline: The company's remaining performance obligations (RPO) skyrocketed to $553 billion, a 325% year-over-year increase, primarily driven by large-scale AI contracts, showcasing Oracle's strong competitive position in the AI sector.
- Capital Expenditure Concerns: Despite the projected $50 billion capital expenditure for fiscal 2026 to support AI demand raising investor concerns about financial stability, Oracle's stock trades at a forward P/E ratio of about 19, which is below the market average, suggesting potential undervaluation amidst these risks.
See More
US Stocks Decline Amid Iran War Concerns
- Market Pressure Intensifies: The S&P 500 index fell by 0.37%, and the Nasdaq 100 dropped to a 3.75-month low as rising bond yields raised inflation concerns, indicating a pessimistic outlook for future economic conditions.
- Surging Energy Prices: The IEA reported that the Iran war is disrupting 7.5 million barrels per day of global oil supply, and the closure of the Strait of Hormuz has obstructed about one-fifth of the world's oil flow, potentially pushing crude prices above the 2008 record high of nearly $150 per barrel.
- Fed Policy Expectations: The market is pricing in only a 10% chance of a 25 basis point rate hike by the Fed at the April meeting, reflecting investor concerns over slowing economic growth, which could influence future monetary policy directions.
- Tech Stocks Decline: The
See More
Oracle's AI Infrastructure Strategy Pays Off
- Cloud Infrastructure Growth: Oracle's cloud infrastructure business achieved an 84% year-over-year growth, reaching $4.9 billion, reflecting strong demand for AI workload cloud computing and further solidifying its market position.
- Significant Backlog: Oracle's remaining performance obligations (RPO) surged 325% year-over-year to $553 billion, indicating the company's robust potential for future revenue growth, despite current funding pressures.
- Financing Strategy Adjustment: The company plans to raise $50 billion through convertible preferred stock and bonds, having already secured $30 billion, which, while impacting cash flow, is sufficient to support its infrastructure expansion.
- Future Revenue Expectations: Oracle anticipates revenue of $67 billion for fiscal 2026 and has raised its fiscal 2027 revenue forecast to $90 billion, indicating significant growth potential over the next two years amid surging demand for AI computing.
See More
Trump Administration Unveils National AI Policy Framework
- Framework Announcement: On July 23, 2025, the Trump administration unveiled a national policy framework for artificial intelligence in Washington D.C., aiming to establish uniform safety and security measures for emerging technologies while preventing states from enacting their own AI regulations, ensuring nationwide regulatory consistency.
- Six Regulatory Proposals: The framework outlines six key regulatory measures, including implementing child safety rules and standardizing permitting and energy use for AI data centers, designed to enhance the safety of AI products and infrastructure while protecting lawful political expression and dissent rights.
- Congressional Collaboration Plan: The White House aims to work with Congress in the coming months to convert this framework into law, anticipating bipartisan support, although pushing this process faces challenges in a divided Congress, especially with Trump prioritizing other legislative efforts.
- Industry Opposition: AI industry leaders have strongly opposed state-level legislation, arguing that a
See More
