Is Oracle (ORCL -0.89%) stock losing its momentum? Shares of the artificial intelligence (AI)-powered cloud giant peaked at $328.33 in 2025 but have since declined by around 18% to near $285 levels. Not surprisingly, some investors may wonder if the rally is already over.
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However, that line of thinking does not take into account Oracle's long-term growth prospects. Oracle's remaining performance obligations skyrocketed 359% year over year to $455 billion at the end of the first quarter of fiscal 2026 (ending Aug. 31, 2025). This dramatically improved the company's revenue visibility for the coming years.
While those 455 billion reasons alone make Oracle stock hard to ignore, several more catalysts can spur its share price higher even in the next few months. Here's why Oracle is positioned to be the next monster stock of this decade.
AI infrastructure catalyst
AI giants are increasingly opting for Oracle Cloud due to its performance and cost advantages in training and running complex AI models. The names in Oracle Cloud's client list are already impressive. OpenAI, xAI, Meta Platforms, Nvidia, and Advanced Micro Devices signed deals to run AI workloads on the company's cloud infrastructure.
Oracle's $300 billion five-year contract with OpenAI highlights the robust demand for its large-scale GPU-centric data centers. Thanks to such mega-deals, the company is now guiding for its Oracle Cloud Infrastructure (OCI) revenues to soar 77% year over year to $18 billion in fiscal 2026, and then reach $32 billion in 2027.
It is also rumored that Oracle is in late-stage talks with Meta Platforms on a $20 billion multiyear deal to provide computing power for training and running Meta's AI models. If this deal goes through, it would position Oracle as a major hyperscaler competing with Amazon's AWS, Microsoft's Azure, and Alphabet's Google Cloud.
Beyond its GPU-centric infrastructure business, Oracle is also making significant progress in non-GPU infrastructure. The company's multi-cloud strategy, which embeds its database regions directly within AWS, Azure, and Google Cloud, enables customers to use them without needing to shift from their existing cloud providers. Currently, 34 of Oracle's multi-cloud data centers are operational, with an additional 37 planned -- bringing the total to 71.
This expansion strategy has made Oracle more entrenched in the enterprise IT stack, attracting even those clients that might otherwise resist the disruption of moving to a new cloud.
Oracle plans to invest around $35 billion in capital expenditures in fiscal 2026, with the majority focused on revenue-generating equipment in data centers. As the company rapidly expands its capacity, the $455 billion backlog is expected to soon translate into revenue and profits.
AI inference
Oracle's gigawatt-scale data centers are proving exceptionally fast and efficient in training large AI models. However, while AI training is a multitrillion-dollar market, AI inferencing (the real-time deployment of AI models) will prove to be an even bigger opportunity, as enterprises begin to use AI to address real-time challenges across various industries and functions.
Being the largest custodian of high-value private enterprise data globally, Oracle is positioned to capture a large share of the AI inference market. Enterprises can "vectorize" (change to numbers using algorithms) and store their data in the company's AI database. Vectorization enables all large language models to comprehend this data accurately.
Oracle has also made it easier for clients to connect all their databases, Oracle AI databases, and cloud storage to major large language models inside Oracle Cloud. Subsequently, the enterprise can deploy the large language models' advanced reasoning capabilities to provide answers and insights based on a combination of private enterprise data and public data, all without compromising the security and integrity of the private data. This is expected to drive further adoption of Oracle's database service in AI workloads.
Leadership
Oracle has also made changes in top leadership to accelerate its AI and cloud ambitions. The company promoted Clay Magouyrk, former president of OCI, and Mike Sicilia, former president of Oracle Industries, as co-CEOs. Safra Catz, the company's CEO since 2014, is now the executive vice chair of the board of directors. This management change underscores Oracle's growing emphasis on AI hardware and industry-specific, AI-powered applications.
Potential regulatory catalyst
Oracle could also benefit from the U.S. government's pending deal to transfer TikTok's U.S. operations from China-based parent company ByteDance to majority U.S. ownership. Under the proposed sale agreement, Oracle would oversee TikTok's recommendation algorithm on its infrastructure.
If this deal passes through, Oracle would not only secure another multibillion-dollar customer but also improve its reputation for handling sensitive regulatory and data security matters. This can prove to be a key differentiator in securing sovereign AI projects in the years to come.
Valuation
Oracle trades at a rich valuation of nearly 41.5 times forward earnings. The company's $91.3 billion total debt at the end of the first quarter is hard to ignore. Oracle further increased debt to fund its massive AI capex by selling $18 billion of U.S. bonds in September 2025. Understandably, Wall Street is concerned about the company's rising leverage.
However, this is a company with a $455 billion backlog, multibillion-dollar AI contracts, and a differentiated multi-cloud and database strategy. Analysts also expect the company's earnings per share to soar nearly 40% year over year to $6.03 in fiscal 2026. Additionally, rapidly growing companies with high revenue visibility and a broad customer base are rarely cheap. Considering the solid tailwinds and robust financials, the current pullback seems to be an attractive entry point for long-term investors.
