Down 55% From Its High, Is Oracle a Buy?
Key Points
The company saw strong revenue and backlog growth in fiscal 2026, but free cash flow turned sharply negative.
Oracle is investing aggressively in AI infrastructure to meet demand.
- 10 stocks we like better than Oracle ›
If you were an Oracle (NYSE: ORCL) shareholder back in September 2025, you may have prematurely declared the company the winner of the AI boom. Since the stock skyrocketed to $345 last fall, the company's share price has shed roughly 55%. Amid volatility and the steep drop, is Oracle a buy again?
Oracle's fundamentals are solid and, for the most part, continue to strengthen. The company's fiscal 2026 revenue grew 17% to over $67 billion. Net income rose 36% while Oracle's cloud infrastructure revenue jumped an impressive 75% year over year. The company's backlog totaled $638 billion at the end of the fiscal year, providing enormous future revenue visibility.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Oracle's valuation has fallen to a point that it almost looks oversold. The stock's forward P/E ratio has dropped to about 17, while the PEG ratio sits well below 1. For a rapidly growing tech company, this is more than reasonable; it's an opportunity.
Image source: The Motley Fool.
Of course, there are still many risks. Oracle is spending heavily on data centers, which has increased the company's debt and turned its free cash flow negative. These are also the reasons why the stock has plummeted in 2026.
If backlash around build-outs continues or demand weakens, Oracle would be left with a hefty bill. However, demand is still soaring, and the contracted backlog provides a level of safety that makes Oracle an enticing buy.
As of Sept. 2, Oracle is trading around $145 per share, $200 below its all-time high. The AI boom isn't slowing, and Oracle has been repriced. Potential Oracle investors have an attractive entry point here.
Should you buy stock in Oracle right now?
Before you buy stock in Oracle, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Oracle wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $446,157!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,377,357!*
Now, it’s worth noting Stock Advisor’s total average return is 983% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of September 3, 2026.
Catie Hogan has positions in Oracle. The Motley Fool has positions in and recommends Oracle. The Motley Fool has a disclosure policy.
Recommended Articles
