Time to buy Oracle ORCL?

Oracle Corp ORCL is trying to transform from a legacy database provider into a specialized cloud and AI infrastructure leader…trying to become an AI infrastructure landlord that owns the pipes behind large-scale model training and enterprise AI deployment. Its core product portfolio is anchored by Oracle Cloud Infrastructure (OCI) and the Oracle Fusion Cloud suite, which includes applications for Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Human Capital Management (HCM).

Currently, Oracle maintains dominant market leadership in several sectors, notably being named a leader in the 2026 Gartner Magic Quadrant for Supply Chain Planning, Warehouse Management (for the 11th consecutive year), Transportation Management, and Source-to-Pay Suites. They are deeply entrenched in enterprise workloads with a large customer base and sticky high switching costs.

The company’s recent AI ambitions are defined by a massive pivot toward high-performance compute capacity, evidenced by a $300B, five-year cloud contract with OpenAI (OAI) signed in late 2025. Under this partnership, OAI has moved away from exclusive reliance on Microsoft Azure to utilize OCI’s scalable infrastructure for training and inference of its next-generation models. To fund this historic buildout, Oracle plans to raise up to $50B in 2026 through debt and equity, targeting a total revenue goal of $90B by fiscal year 2027. Oracle is also a core partner in Project Stargate, a massive $500B private-sector initiative involving OpenAI and SoftBank to develop a network of AI-dedicated data centers across the United States. A flagship component of this project is the Abilene, Texas campus, which is expected to reach nearly 1.2 gigawatts of power by mid-2026. Oracle is overseeing the development of this site, where it will ultimately deploy over 450,000 NVIDIA GB200 GPUs to support extremely large-scale AI model training.

Markets initially rejoiced on all these AI related developments and shot the stock up to new highs in Aug 2025. But then upon further reflection decided that they did not like the high capex investment needed and became skeptical about OAI’s ability to grow their revenues and turn a profit.

And so ORCL’s stock suffered…dropping lower for several months and clocking all time lows around $134. However, the stock has been behaving well recently. In fact, since double-bottoming in Feb and Apr this year, the stock has risen about +64%.

So, is it a good time to buy ORCL 0.00%↑ stock now?

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Here is the ORCL stock chart…

As you can see, in spite of a massive move higher from the lows, the stock has a long way to go higher and it could face strong resistance as it climbs.

It has broken above all the key moving averages including the critical 200DMA. If it can successfully retest the 200DMA at around $207 then it could get much higher all the way back to the mid-$300s.

But let’s make note of some underlying technical weak signals - daily trading volume is still dropping even as the stock is now overbought. As the stock increases in price, “trapped” buyers from last year will look to sell and get out if their conviction is weak. Fundamentally, ORCL’s balance sheet is lopsided with about $114B in net debt (total cash - total debt) along with deeply negative cash flows (due to high AI capex spend).

On the other hand, if you look at forward growth forecasts, they are very impressive…Their Q1 earnings report coming out in mid-June is estimated at +23% yoy revenue growth and +68% yoy earnings growth. Growth rates for sales and margins are expected to keep trending higher for at least the next 8-10 quarters!

In summary…

• OCI growth remains strong

• AI demand tailwinds are real and likely durable

• Operating leverage potential if scale is achieved

• Forward growth expectations are elevated

• Heavy capex cycle weighing on near-term cash flow

• Balance sheet leverage is meaningful relative to peers

• Execution risk in competing with larger hyperscalers

• Stock may face overhead resistance from prior buyers

Considering all the information we currently have…as we wait for their upcoming earnings report…

Yes…this might be a good time to buy Oracle ORCL 0.00%↑ .

We think that current prices are likely a low risk level to start a position.

We have two preferred BUY points at $207 and $175.

The AI race is still in the first innings and the slow tortoise might just prove to be faster than all the flashy rabbits up ahead.

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Disclosure: We may have a long term investing position or a short term trading position in the stock discussed above.