Is Oracle a Good Buy Right Now?

What Is Happening With Oracle Stock Right Now?

Oracle (ORCL) is one of the most compelling paradoxes in the AI technology sector right now. The stock has been one of the most punished mega-cap AI stories of 2026, sliding from a $303.62 peak to around $152,  a fall of nearly 50% despite the underlying business delivering some of the strongest results in its history. 

The disconnect between Oracle’s financial performance and its share price is stark. Q1 FY2027 results reported on 10 September 2026 showed cloud infrastructure revenue growing 121% year over year to $7.4 billion, with total cloud revenues up 62% to $11.6 billion. The company booked more than $30 billion of additional AI cloud contracts in the quarter, lifting its remaining performance obligations to $664 billion, a figure that represents an extraordinary pipeline of future revenue. 

Yet the stock trades near its lowest levels since early 2025. Understanding why and whether the sell-off represents an opportunity is what this article sets out to examine.

Oracle: Company Overview

Oracle Corporation (NYSE: ORCL) is one of the world’s largest enterprise technology companies, best known for its database software and cloud infrastructure services. Founded in 1977 by Larry Ellison, it has transformed over the past decade from a traditional software vendor into a major cloud and AI infrastructure provider through its Oracle Cloud Infrastructure (OCI) platform.

Oracle’s business now operates across two primary segments:

• Cloud Services — Infrastructure as a Service (IaaS) and Software as a Service (SaaS)
• Software Licences and Support — legacy on-premise software business, gradually declining as customers migrate to cloud

Cloud Infrastructure revenue surged 93% in Q4 FY2026 to $5.8 billion, while Oracle’s Multi-cloud AI Database business grew 404% making it the fastest-growing business in the company’s history. 

You can gain exposure to Oracle through XTB’s shares platform or trade short-term price movements via CFDs.

The Bull Case for Oracle

1. AI Cloud Demand Is Outstripping Supply

Customer demand for AI cloud training and inferencing services continues to grow faster than Oracle’s ability to supply it. This is not a demand problem, it is a capacity problem. Oracle is building data centres as fast as physically possible and still cannot keep up with customer commitments. 

Oracle delivered 850 megawatts of new capacity in Q1 FY2027 alone, a significant infrastructure expansion, yet the backlog continues to grow. The company raised its full-year FY2027 revenue guidance to at least $90 billion and raised non-GAAP EPS guidance to $8.10. 

2. The RPO Pipeline Is Extraordinary

Remaining Performance Obligations (RPO) — the contracted future revenue Oracle has not yet recognised, stands at $664 billion. RPO climbed to $638 billion at the end of FY2026, up an extraordinary 363% year over year, reflecting strong demand for AI-related cloud services. This pipeline provides exceptional visibility into future revenue growth that most technology companies cannot match. 

3. Strong Analyst Consensus

Of 43 analysts covering Oracle, 30 rate it Buy and 6 Strong Buy, with a consensus target of $252.64 implying approximately 46% upside from current levels. Wedbush analyst Daniel Ives raised his price target on Oracle to $275 while maintaining a Buy rating, while Oppenheimer’s Brian Schwartz raised his target to $235 and reiterated Oracle as his top pick. 

4. Q1 FY2027 Beat on All Key Metrics

Oracle reported Q1 FY2027 non-GAAP earnings of $1.92 per share, beating the consensus estimate by 10.3% and increasing 30% year over year. Total revenue of $19.34 billion increased 30% from $14.93 billion a year ago. The acceleration in cloud infrastructure growth from 93% in Q4 FY2026 to 121% in Q1 FY2027 signals the business is genuinely accelerating — not decelerating. 

5. Dividend Income While You Wait

Oracle’s board declared a quarterly cash dividend of $0.50 per share, payable on 23 October 2026 to shareholders of record on 9 October 2026. For investors holding shares through the period of uncertainty, the dividend provides income while the investment thesis plays out. 

The Bear Case for Oracle

1. Negative Free Cash Flow

Despite record operating cash flow, free cash flow was negative $23.7 billion in FY2026 due to heavy investments in cloud infrastructure. Free cash flow was negative $5 billion in Q1 FY2027 alone as Oracle continued to invest heavily in AI data centre capacity. Until this investment cycle matures and revenue converts from the RPO backlog, cash generation remains constrained. 

2. Most New Contracts Won’t Generate Revenue Until FY2028

Management said roughly half of RPO should convert to sales over the next 36 months, but most new Q1 contracts will not affect revenue or capital needs until fiscal 2028 or beyond. The pipeline is impressive, but investors may need to wait longer than expected for it to translate into reported revenue growth. 

3. Debt Levels Remain Elevated

Oracle has taken on significant debt to fund its AI infrastructure expansion. High debt levels combined with negative free cash flow and rising interest costs create financial risk if AI spending by major cloud customers slows unexpectedly.

4. Valuation Is Not Cheap

Even after a 50% decline from its peak, Oracle is not obviously cheap on a traditional valuation basis. The investment case relies heavily on future revenue conversion from the RPO pipeline, which requires faith in management’s execution over the next two to three years.

5. The Project Jupiter Incident

Oracle confirmed that Project Jupiter flooding caused no major damage, but the incident highlighted the physical risks associated with Oracle’s massive data centre expansion programme and contributed to a 5% single-day stock decline. As Oracle scales infrastructure at unprecedented speed, operational risks increase.

Oracle vs Competitors: How Does It Compare?

Oracle operates in the cloud infrastructure market alongside Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, all significantly larger than OCI. However Oracle has carved out a specific niche in AI infrastructure, particularly for customers who need high-performance GPU computing at scale.

Oracle’s Multi-cloud AI Database business, which allows customers to run Oracle databases on other cloud providers grew 404% in Q4 FY2026, suggesting the multi-cloud strategy is resonating and reducing customer lock-in concerns that have historically weighed on the stock. 

For investors interested in broader AI semiconductor exposure, read our guide to AMD vs Broadcom for a comparison of the two other major AI infrastructure plays.

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Data as of October 2026. For informational purposes only.

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Capital at risk. Investment values can rise or fall. Past performance is not a reliable indicator of future results.

This article is for informational and educational purposes only and does not constitute financial advice or a personal recommendation to buy or sell any investment. Always consider your individual circumstances and if in doubt, seek independent financial advice.

How UK Investors Can Gain Exposure to Oracle

Direct share investing — buy Oracle shares directly through XTB’s shares platform. As a US-listed stock, UK investors are subject to 15% withholding tax on dividends under the UK-US tax treaty. Shares can be held within a Stocks & Shares ISA to shelter capital gains from tax.

CFDs — trade Oracle’s price movements without owning the underlying shares using CFDs. CFDs offer leverage and the ability to go short, useful for traders wanting to express a short-term view on the stock. 

ETFs — gain broader technology sector exposure through ETFs tracking the NASDAQ 100 or S&P 500, both of which include Oracle as a constituent. This provides diversified exposure without the concentration risk of a single stock position.