Down 55% From Its High, Is Oracle a Buy?
Key PointsThe company saw strong revenue and backlog growth in fiscal 2026, but free cash flow turned sharply negative.
If you had held Oracle (NYSE: ORCL) shares in September 2025, you might have prematurely hailed the company as the victor of the AI boom. However, the stock has since plummeted by approximately 55% from its peak of $345. Amidst this volatility and significant drop, the question arises: is Oracle a worthwhile investment once again?
Oracle's fundamentals remain robust, with the company's fiscal 2026 revenue expanding by 17% to exceed $67 billion. Net income witnessed a substantial 36% increase, while Oracle's cloud infrastructure revenue surged by an impressive 75% year-over-year. At the fiscal year's end, the company boasted a staggering backlog of $638 billion, offering immense future revenue visibility.
Moreover, Oracle's valuation has become so reduced that it appears to be oversold. The stock's forward P/E ratio has plummeted to around 17, whereas the PEG ratio sits well below 1. For a rapidly growing tech company, this represents a highly reasonable valuation, signifying a potential investment opportunity.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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