Oracle shares have tumbled more than 50% from last year's peak, yet most Wall Street analysts still rate the stock a buy. The company reported rapid cloud growth and about $553 billion in remaining performance obligations, even as total debt rose to roughly $149 billion and free cash flow turned sharply negative. Analysts' median price targets imply significant upside versus the market price. That split between bullish forecasts and investor selling has made Oracle one of the market's most contested large-cap stories.

Big numbers on both sides

Oracle’s recent quarter showed fast cloud growth. Cloud revenue rose roughly 44% year over year to about $8.9 billion. Multicloud database sales surged even more in percentage terms. At the same time, the company disclosed a remaining performance obligations figure of about $553 billion, up about 325% from a year earlier.

The market has reacted differently to those numbers.

Shares traded near the low $140s in recent sessions, down from a 52-week high above $340. Many investors sold after a string of headline events. Earnings season volatility, a large debt build-up, and geopolitical headlines all pressured sentiment.

Wall Street’s coverage stayed tilted toward the bullish case. Across major brokerages, a large majority of analysts continue to rate Oracle a buy or strong buy. Those sell-side targets put the stock well above current market prices, with median targets roughly in the mid-$200s.

How Oracle is funding its pivot

The shift to AI infrastructure has been capital intensive. Oracle has poured money into data centers and hardware capacity to court hyperscalers and cloud customers. Management has signed big contracts that include customer prepayments or customer-provided GPUs, which the company says limits some of its capital risk.

Investors worry about how that spending is being financed.

Total and non-current debt figures cited in recent reporting run into the hundreds of billions. One set of figures shows non-current debt near $124.7 billion at fiscal year-end, while another counts total debt at about $149 billion as of February 2026. The company also raised tens of billions of dollars in bonds and other securities in the past year.

Capital spending outpaced operating cash flow. Over a trailing 12-month period cited in filings, Oracle spent roughly $48.2 billion in capital expenditures while generating near $23.5 billion in operating cash flow. That gap pushed trailing free cash flow into negative territory in the latest periods reported.

What bulls point to

Bullish analysts focus on revenue momentum and forward visibility. Oracle posted a quarter in which organic revenue and non-GAAP earnings both showed double-digit growth. Cloud infrastructure revenue jumped sharply, with one quarter showing an 84% year-over-year increase in that segment.

Mastheads

Management raised revenue guidance for the coming fiscal year. The company also emphasizes the large backlog of contracted business as evidence of predictable future revenue. Bulls argue that a big portion of next year’s revenue is effectively locked in, which could justify higher valuations despite the debt load.

Market supporters also note structural demand for AI compute and data-center capacity. Oracle’s scale in data-center operations gives it access to customers that need large amounts of capacity quickly. That positioning helped the stock rally after several product announcements in April.

What bears worry about

Bears point to the balance sheet and execution risk. Heavy borrowing has raised borrowing costs and interest expense. One report shows interest expense rising about 32% year over year to roughly $1.18 billion in a recent period.

Debt-fueled expansion creates timing and payment risks. Some of Oracle’s big AI contracts hinge on customers, including a noted partner, paying for the compute they agreed to buy. If those commitments shift, Oracle could face slower cash conversion.

Other headlines have amplified fear. Reports of job cuts and a lawsuit from bondholders alleging the company misled investors about its debt needs weighed on sentiment. Geopolitical stories also briefly put Oracle in a negative news cycle.

Analysts and institutional research often emphasize long revenue tails and backlog conversion. Sell-side models price in conversion of large contracted amounts into cash over time. Those models produce price targets implying strong upside from current levels.

Retail and institutional traders are pricing near-term liquidity and macro risk more harshly. The market tends to focus on the next several quarters of cash flow and debt service rather than multi-year backlog figures. That difference in time horizon helps explain why analysts can stay bullish while the stock keeps falling.

Oracle has issued large bond offerings and other securities recently. One set of figures shows about $43 billion in new bonds issued in the first nine months of fiscal 2026, and plans to raise further capital through equity sales. Other reporting notes about $30 billion had been raised via bonds and convertible preferred stock, with plans for additional fundraising still in the mix.

Those fundraising steps reduce immediate liquidity pressure but increase outstanding obligations. They also dilute current shareholders if the company follows through on planned stock sales. The market prices both added cash and the higher leverage on the balance sheet.

Credit markets have taken note. Measures tied to default risk rose for Oracle’s debt.

One data point showed credit default swaps on Oracle debt reaching levels not seen since before the global financial crisis. That pushed yields and borrowing costs higher in secondary markets.

Stock market positioning also shifted. The selloff accelerated after a revenue miss in a prior quarter and a large single-day decline following that report. Subsequent product announcements and a rebound in cloud metrics prompted short-term rallies. But the overall trend left the equity down sharply year to date.

The story comes down to three linked facts. First, Oracle has a very large contracted backlog. Second, it's funding a rapid infrastructure build with significant borrowing. Third, near-term cash flow and debt service figures are tighter than before the pivot.

Which of those facts you weight most determines your view of the stock.

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The numbers are stark: about $553 billion in remaining performance obligations and roughly $149 billion in total debt in recent filings.

This article was created with AI assistance.