TLDR
- Oracle stock is down 25% this year and 36% over the past 12 months
- Earnings are scheduled for September 10
- Jefferies cut its price target to $290 from $320 but still sees the stock nearly doubling from $145.75
- Revenue grew 17% in fiscal 2026, with cloud revenue up 39%
- Total debt stands at $129.5 billion, a key concern for investors
Oracle (ORCL) stock trades at $145.75, down 25% year-to-date and 36% over the past 12 months. The stock is off roughly 57% from its 52-week high of $345.72.
The drop comes despite Oracle’s revenue growing 17% in fiscal 2026. Its cloud segment led the way with 39% growth, overtaking the software segment as the company’s largest revenue source.
Investors have been spooked by Oracle’s debt load and spending commitments. Total debt reached $129.5 billion as of May 31, up from $92.6 billion a year earlier. Capital expenditures over the last year hit $55.7 billion as Oracle builds out AI infrastructure.
The company also carries around $260 billion in off-balance-sheet data center commitments, roughly three times its projected full-year 2027 capex.
Oracle’s backlog has been growing fast. Since last September, it has climbed from $455 billion to $638 billion. The company also added $183 billion in order backlog since September 9 last year, compared to $138 billion on that date.
Much of the original optimism came from a $300 billion multiyear deal with OpenAI announced last year. But investor confidence in that deal has faded as questions grew about OpenAI’s ability to meet its financial obligations.
Jefferies Sees Favorable Risk/Reward
Jefferies analysts, led by Brent Thill, cut their price target to $290 from $320 but maintained a bullish outlook. They believe most of the bad news is already priced in, calling the stock “near peak negative sentiment.”
At $145.75, Jefferies still sees the stock almost doubling to reach their target. They described the stock as “overly beaten down” with a favorable risk/reward setup.
Quarterly revenue growth accelerated from 12% to 21% during the fiscal year ending May 2026. Book value more than doubled from under $21 billion a year ago to $43.1 billion.
Oracle’s P/E ratio sits at 25, slightly below the S&P 500 average of 30. That leaves room for the stock to re-rate if investor confidence returns.
Beaten-Down Software Stocks Getting a Second Look
Oracle is not alone in being under pressure, but it may be uniquely positioned for a bounce. Salesforce (CRM) gained over 20% after earnings. Elastic (ESTC) and Okta (OKTA) saw similar moves. Snowflake jumped 24% pre-market Thursday after its fiscal second-quarter results.
The pattern of beaten-down software stocks surging on earnings is drawing attention to Oracle ahead of its September 10 report.
Jefferies does flag the ongoing risks. Capital spending is still ramping while free cash flow remains negative, and credit ratings are under pressure.
Oracle reports earnings on September 10.
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