I keep adding to my research position in Oracle (NYSE:ORCL | ORCL Price Prediction) every time the stock gives me a chance, and I am not slowing down. The stock sits at $142.45 after falling 39.05% over the past year, and that is precisely what pulled me in. The market is treating Oracle like a leveraged bet gone wrong. I read the same filings and see something the crowd is missing: the widest asymmetry I have found in enterprise software.
What The Contract Backlog Is Telling Me
Oracle finished Q4 FY2026 with remaining performance obligations of $638 billion, up 363% year over year. Cloud infrastructure revenue grew 93%, global GPU utilization ran at 97.5%, and Safra Catz laid out an OCI ramp from $18 billion this year to $32 billion, $73 billion, $114 billion, and $144 billion over the following four years. Most of that revenue is already contracted. Management reaffirmed a 31% revenue CAGR and 28% EPS CAGR through fiscal 2030. That is the kind of visibility I rarely find at a forward P/E of 18 and a PEG of 0.83.
Why My Money Skips Azure And AWS
The obvious alternatives are Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). Both are excellent businesses already priced as fortress compounders. Microsoft trades at a forward P/E of 24 with a PEG of 1.57, and Amazon carries a forward P/E of 22 and a PEG of 1.39. Neither multiple leaves room for surprise. Oracle’s Multicloud AI Database grew 404% in Q4 because its databases now sit inside AWS, Azure, and Google Cloud, with 72 multicloud datacenters more than halfway complete. I am buying the tollbooth the hyperscalers are hosting for me, at a discount to the hosts.
Balance Sheet Fear I Have Already Priced In
The bear case is plain. Free cash flow ran negative $23.69 billion in FY2026, capex hit $55.66 billion, non-current debt climbed to $124.7 billion, and Oracle plans to raise roughly $40 billion in FY2027 through debt and a $20 billion at-the-market equity program. Reddit noticed. A thread flagging Larry Ellison’s 346 million pledged shares pulled 1,641 upvotes. That is the actual risk: if AI capex demand stalls, Oracle absorbs execution friction and dilution. I accept that trade. Paying MSFT and AMZN multiples for less asymmetry is the deal I walk away from.
Why The Buy Button Stays Active
Management guided FY2027 to $90 billion in revenue and $8.05 in non-GAAP EPS, with $75 billion in bring-your-own-hardware and prepaid contracts reducing Oracle’s cash burden. Steady-state project ROIC is expected in the high 20s. If AI deployment accelerates, the same leverage that scares the market becomes an EPS multiplier the moment free cash flow flips positive. Oracle is one slice of the data-center buildout, and we profiled seven other suppliers powering, cooling, and networking that same wave in a free AI infrastructure report. I collect a $2.00 annual dividend at a 1.41% yield while I wait. The downside math is contained. The upside math compounds. That is why the setup keeps my attention.
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