Oracle (ORCL 0.25%) is making a bold move, and investors are not exactly pleased with the decision. At least that's the logical conclusion to draw from the fact that, as of this writing, the stock is down 55% from its 52-week high. That said, so far the company's big gamble appears to be working out as planned. Here's what you need to know.
Oracle is leaning into artificial intelligence
Artificial intelligence (AI) is the latest technology craze, and many people believe, quite realistically, that it will change the world. Oracle's enterprise application business could be impacted by AI, so it makes sense that the company is working to find a way to benefit from the technology. At this point, it is helping to build out the infrastructure needed to support AI.
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Building AI infrastructure comes with huge upfront costs. That is part of the reason why Oracle's long-term debt load has risen nearly 66% since the start of 2025. That's a massive increase in a very short period of time, and investors are probably justifiably worried. And yet, the news is actually fairly positive around the technology giant's AI investment.
A lot of work has been done, and there's more to be done
For starters, Oracle's cloud infrastructure revenue rose 84% year over year in the fiscal third quarter of 2026. And at $4.9 billion, this is not a small business. Essentially, Oracle's AI infrastructure investment is already rewarding the company.
NYSE: ORCL
Key Data Points
That said, the company's remaining performance obligations, which are essentially its backlog, rose 325% year over year. The backlog sits at a massive $553 billion. While it is entirely possible that some of that work won't materialize as expected, it is very clear that customers are happily working with Oracle as they look to build their AI businesses.
It is too soon to say that Oracle's decision to leverage up so it can lean into AI has paid off. However, it is clear that the company's efforts are well received by the technology sector, even if Wall Street appears skeptical of Oracle's ambitions.
Understand the risks, but Oracle looks relatively cheap
Oracle is a well-established technology company with a long history. It is not a money-losing AI start-up hoping to leverage a new technology to break into the industry. Long-term investors might want to take a closer look, given the growth of its AI business and its huge backlog. And, given the dramatic share price decline, the stock looks cheaper than it has in a few years, with its price-to-sales and price-to-earnings ratios both back below their five-year averages.
