Oracle’s Disruptive Nature is Very Compelling
Oracle just posted contract backlog numbers that most cloud giants would envy, yet the stock sits 31% below its peak. Here is why one investor keeps adding shares while Wall Street looks the other way.
I keep buying Oracle, and the reason is simpler than my order history makes it look. The company built a lower-cost way to run AI workloads, and customers are signing contracts that stretch years into the future. That is the whole thesis. Everything else is receipts.
Here is the moment that pulled me in. On the Q4 fiscal 2026 call, co-CEO Clay Magouyrk described Oracle Cloud Infrastructure as “the most highly secure, highest performing, most flexible, lowest-cost infrastructure available anywhere.” Contract backlog backs it up. Oracle (NYSE:ORCL | ORCL Price Prediction) ended the quarter with Remaining Performance Obligations of $638 billion, up 363% year over year, after signing $67 billion in AI infrastructure contracts during the quarter alone. When a customer prepays or brings their own hardware, they are voting with treasury cash. $75 billion of that RPO is tied to prepaid or customer-supplied GPU arrangements, which lowers Oracle’s own capital burden.
Three Reasons I Keep Adding
First, the growth is real and it is accelerating. IaaS revenue climbed from +55% in Q1 to +68% in Q2, +84% in Q3, and +93% in Q4 of fiscal 2026. Cloud is now 52% of quarterly sales compared to 43% a year ago. Management guided fiscal 2027 revenue to $90 billion with non-GAAP EPS of $8.05, and reaffirmed a long-range plan of more than 31% revenue CAGR and more than 28% EPS CAGR through fiscal 2030.
Second, the economics of the buildout hold up. Management reiterated a 30% to 40% margin profile on OCI and told analysts steady-state project ROIC lands in the high 20s. Global GPU utilization sits at 97.5%. Cash from operations grew 54% to $32.0 billion for the full year. Oracle still pays me a $0.50 quarterly dividend while it invests.
Third, the price got kind. Oracle trades at $162.52, down 31.07% over the past year. Against forward EPS of $9.30, the implied forward multiple is roughly 21. For a business compounding cloud at these rates, I will take it.
Why Not the Hyperscalers
The retirement crowd usually reaches first for Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), or Alphabet (NASDAQ:GOOGL). I own some of that too. What tips my next dollar to Oracle is footprint and neutrality. Magouyrk said Oracle has “over 211 live and planned regions worldwide, more than any of our cloud competitors”, and Oracle is building 72 Multicloud datacenters embedded inside Amazon, Google, and Microsoft clouds. Multicloud AI Database revenue grew 404% in Q4. Oracle wins whether the customer chooses AWS, Azure, or GCP for the rest of the stack. That is a rare position, and it is why the power, cooling, and networking names behind these buildouts keep showing up in our free AI infrastructure report.
Risk I Take Seriously
Free cash flow was negative $23.686 billion in fiscal 2026 on capex of $55.663 billion. Non-current debt reached $124.7 billion, and Oracle plans to raise about $40 billion in fiscal 2027 through debt and equity, including a $20 billion at-the-market equity issuance. Dilution and interest expense are real. What keeps me buying is that 12% of RPO converts to revenue in the next 12 months and another 34% within 13 to 36 months. The cash flows to service that leverage are already contracted.
What Keeps the Buy Button Warm
Fiscal 2027 revenue and earnings are guided to accelerate in the second half as megawatts come online, and the CFO’s prior long-range map takes OCI from $18 billion in fiscal 2026 to $144 billion four years later. When a company sells a lower-cost version of the scarcest resource in the economy, and books the demand years in advance, With a lower-cost version of the scarcest resource in the economy and demand booked years in advance, I keep adding.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
