WHAT ARE THE LATEST UPDATES AND NEWS ON ORACLE STOCK?

Cloud strength but investor anxiety

Oracle stunned Wall Street with its Q2 FY2026 results on 10 December 2025, revealing 14% revenue growth year-over-year, driven primarily by a 68% surge in cloud infrastructure revenue. Cloud-related sales now total $8 billion quarterly, with infrastructure-as-a-service (IaaS) contributing $4.1 billion and SaaS $3.9 billion. Even more compelling is the remaining performance obligations (RPO) figure, which exploded 438% to $523 billion—an unprecedented backlog in enterprise software.

Yet despite these figures, ORCL shares plunged 11–14% in the days following the release. Why? Investor focus has sharply shifted from revenue growth to execution risks and fiscal discipline. The Capex guidance hike to $50 billion, up from $35 billion in September, triggered alarm bells. Oracle’s Q2 non-GAAP EPS of $2.26 included a $2.7 billion one-time gain from the sale of Ampere shares, which some investors view as masking operational cost concerns.

RPO optimism meets Capex reality

The $523 billion RPO paints a promising future, particularly as deals with firms like Meta, Nvidia, Deutsche Bank, and Airbus fuel investor hopes. Oracle's aggressive multi-cloud strategy—deploying databases across Azure, AWS, and Google Cloud—has seen 800% growth in that segment alone.

• Cloud revenue growth at 34% YoY validates Oracle's AI posture

• Database@Google Cloud launch showcases multicloud maturity

• Infrastructure outpacing AWS and Azure in some benchmarks

• Client list includes high-profile names like OpenAI and Panasonic

• RPO backlog dwarfs competitors, indicating strong long-term demand

Nonetheless, even with these positives, execution risks are front and centre. The massive scale of Oracle’s AI data centres, including “Stargate” supercomputing hubs with Microsoft and OpenAI, demands flawless delivery over the next few years to justify the spending spree.

Debt fears and negative cash flow weigh heavy

While Oracle’s top-line numbers dazzle, its bottom-line story raises red flags. The most troubling element is the transition into a negative free cash flow position: Q2 saw -$7.3 billion, with H1 FY2026 now totalling -$10.33 billion. This is largely due to Oracle’s aggressive $50 billion Capex plan focused on AI infrastructure expansion.

Credit markets are taking notice. Credit-default swap (CDS) spreads on Oracle debt have widened to levels not seen since the 2008 crisis. With over $100 billion in debt, investors worry Oracle is burning cash too fast without concrete near-term returns. This fear is compounded by reports from Bloomberg suggesting potential OpenAI project delays to 2028, which Oracle denies but has failed to fully reassure the market about.

Three headwinds shaping sentiment

The recent volatility in Oracle stock can be traced to three primary macro and company-specific themes:

• Ballooning Capex: The $15B upward revision in Capex spooked investors, raising ROI and cash flow timing concerns.

• Rumoured delays: Bloomberg reports on 2028 data centre delivery timelines are adding credibility risk, despite Oracle's denials.

• Macro AI recalibration: Broader tech markets are entering a phase of AI scepticism, with peer names like Nvidia also down 3–4%.

Oracle is now viewed less as a traditional software giant and more as a key AI infrastructure player. This new identity carries heightened sensitivity to debt, Capex, and execution scrutiny. Analysts warn that unless RPO converts to actual revenue at scale and speed, credit rating risks will intensify in early 2026.

Despite this, many bulls argue that Oracle’s AI positioning is unmatched—having established chip neutrality, landed OpenAI as a client, and moved quickly into multicloud setups. If execution holds, today’s discounted price may be a rare entry point.

Where Oracle could go next

Looking ahead, the trajectory for Oracle’s stock will hinge on three critical elements: how quickly RPO backlog turns into recurring revenue, whether Capex can moderate without derailing AI buildouts, and whether Oracle can sustain investor trust during this high-leverage phase.

The March 2026 earnings report will be pivotal. Investors will scrutinise whether sequential RPO growth continues (it rose 15% quarter-on-quarter this time) and whether free cash flow begins to stabilise. Oracle has already stated that its AI data centre milestones are “on track,” but markets will want tangible delivery updates, not just reassurances.

Key catalysts to monitor

• Capex cadence: Updates on how and when the $50B in annual spending will taper could ease credit fears.

• RPO conversion rates: Accelerating backlog-to-revenue movement will help revalue ORCL favourably.

• AI market momentum: Sector sentiment is crucial; a rebound in AI optimism could lift Oracle’s valuation multiples.

• Debt refinancing strategy: Transparent planning around debt servicing may help protect Oracle’s investment-grade status.

• OpenAI confidence: New deal milestones or public demos with OpenAI or Microsoft could restore market faith.

In sum, Oracle is walking a fine line between visionary AI leadership and overextended financial engineering. The stock is acting like a venture-backed AI play rather than a $500B enterprise software stalwart, and that’s causing discomfort. But for risk-tolerant investors who believe Oracle’s strategic bets will pay off, the current dip could represent a once-in-a-decade opportunity.

Stay tuned for further developments—especially in earnings and Capex delivery—as these will make or break the bull thesis on Oracle going into 2026.