Oracle Briefly Touches Trillion-Dollar Valuation Amid AI Pivot, But Risks Loom

Oracle's market capitalization briefly surpassed $1 trillion as investors rallied behind its transformation from a legacy database firm to an AI and cloud infrastructure contender. The stock has since retreated to an $877 billion valuation, but maintains momentum through its $455 billion backlog, OpenAI partnership, and Oracle Cloud Infrastructure growth.

Beneath the surface, concerns emerge. The company plans $35 billion in capital expenditures for fiscal 2026—a staggering sum that eclipses many tech giants' R&D budgets. While operating cash FLOW remains robust at $20.8 billion in fiscal 2025, it falls short of projected capex, signaling potential balance sheet strain.

Wall Street's enthusiasm for Oracle's AI ambitions contrasts with execution risks. The cloud infrastructure arms race demands relentless investment, and Oracle's free cash Flow trajectory warrants scrutiny as it battles hyperscalers for AI workload dominance.