Oracle Stock: Is It Too Late to Buy In Before the Next Big Surge?
Oracle's cloud pivot hits warp speed—legacy giants scramble while Wall Street plays catch-up.
Cloud Dominance or Bust
Oracle's aggressive cloud infrastructure push positions it as the dark horse challenging AWS and Azure. Their enterprise client base provides a built-in moat that startups would kill for.
AI Integration Game
Oracle's AI-driven analytics stack separates the contenders from the pretenders. They're not just selling database licenses anymore—they're selling intelligence.
Financial Reality Check
While analysts debate valuation metrics, Oracle keeps signing nine-figure government contracts. Because nothing says 'stable revenue' like bureaucratic procurement cycles.
Timing the Entry Point
The stock isn't cheap, but quality rarely comes at discount bin prices. Waiting for a pullback might mean watching from the sidelines during the next earnings explosion.
Oracle proves legacy tech can still disrupt—if you've got the guts to bet against the 'everything-as-a-service' hype cycle. Sometimes the old guard learns new tricks faster than the startups.
Image source: Getty Images.
A bookings surge that dwarfs recent growth
In the first quarter of fiscal 2026 (the period ended Aug. 31), Oracle's total remaining performance obligations (RPO), or contracted revenue not yet recognized, ROSE 359% year over year to $455 billion. Quarterly revenue, by contrast, increased 12% to $14.9 billion, with cloud revenue up 28% to $7.2 billion and infrastructure as a service (IaaS) up 55% to $3.3 billion. Management said in its earnings release that it "signed four multibillion-dollar contracts with three different customers" during the quarter, driving the remaining performance RPO spike.
"It was an astonishing quarter -- and demand for Oracle Cloud Infrastructure continues to build," CEO Safra Catz said.
Much of this demand is tied to artificial intelligence workloads, which require massive amounts of compute and storage capacity that Oracle's infrastructure is increasingly being selected to handle.
The step-function change in bookings also towers over Oracle's recent trend. Just last quarter (fiscal Q4 2025), RPO was up 41% to $138 billion, and cloud infrastructure revenue grew 52% to $3 billion -- strong figures that now look pedestrian next to the newest data. That context helps explain the market's reaction: Investors are recalibrating for a larger, longer runway of contracted revenue.
Oracle paired the bookings jump with an unusually specific multiyear plan. Catz previewed a sharp increase in Oracle Cloud Infrastructure revenue -- up 77% this fiscal year to $18 billion -- followed by a ramp to $32 billion, $73 billion, $114 billion, and $144 billion over the subsequent four years.
Oracle Chairman Larry Ellison added that "multicloud" database revenue tied to large partners grew 1,529% in the quarter, and that Oracle will deliver dozens more data centers to those partners to meet demand. He also emphasized that artificial intelligence (AI) companies are among the most important drivers of this growth, leaning on Oracle's partnerships withand others to deliver the scale required for model training and inference. These are forward-looking targets, but most of the five-year forecast is already embedded in reported RPO, according to management.
Valuation looks rich, but the math can work
After Wednesday's jump, Oracle's market capitalization is over $900 billion. That's a big number -- and it puts a spotlight on valuation. Based on Oracle's trailing-12-month non-GAAP earnings of $6.11 per share and today's price, the stock trades at roughly 54 times earnings. A valuation multiple like this requires confidence that revenue and earnings will accelerate as the RPO turns into consumption and as new capacity ramps.
There are risks investors should weigh. Converting enormous bookings into revenue depends on data center build-outs, supply of advanced chips, and customers' implementation timelines. The spending required to meet demand could pressure margins at points, and Oracle still competes head-to-head with hyperscalers on Core workloads. AI demand is also unpredictable. While it's fueling today's surge, the landscape is evolving quickly, and competition could introduce volatility in how these contracts convert to recognized revenue over time. Also worth highlighting is the pace of reported revenue (up 12% this quarter), which is well below the bookings surge; it will take time for recognized revenue to catch up.
But the core story is getting harder to dismiss. Oracle is already demonstrating healthy growth in IaaS, stable momentum in applications, and strong cash generation -- operating cash flow over the last 12 months was $21.5 billion. The company also continues to return cash through a $0.50 quarterly dividend. If even a conservative slice of the RPO converts on schedule while Oracle Cloud Infrastructure grows anywhere NEAR management's near-term plan, earnings power two years from now should look materially different from how it looks today.
Put simply, the stock didn't just pop on hype. It jumped because Oracle's contracted demand base and multiyear visibility look meaningfully larger than they did a quarter ago. That does not remove execution risk, and it does not guarantee linear results. It does, however, support the case that today's premium can be earned down by faster growth, and that it isn't too late for investors willing to own the story through the build-out and the ramp.
