If you were an Oracle (ORCL +6.36%) shareholder back in September 2025, you may have prematurely declared the company the winner of the AI boom. Since the stock skyrocketed to $345 last fall, the company's share price has shed roughly 55%. Amid volatility and the steep drop, is Oracle a buy again?
NYSE: ORCL
Key Data Points
Oracle's fundamentals are solid and, for the most part, continue to strengthen. The company's fiscal 2026 revenue grew 17% to over $67 billion. Net income rose 36% while Oracle's cloud infrastructure revenue jumped an impressive 75% year over year. The company's backlog totaled $638 billion at the end of the fiscal year, providing enormous future revenue visibility.
Oracle's valuation has fallen to a point that it almost looks oversold. The stock's forward P/E ratio has dropped to about 17, while the PEG ratio sits well below 1. For a rapidly growing tech company, this is more than reasonable; it's an opportunity.
Image source: The Motley Fool.
Of course, there are still many risks. Oracle is spending heavily on data centers, which has increased the company's debt and turned its free cash flow negative. These are also the reasons why the stock has plummeted in 2026.
If backlash around build-outs continues or demand weakens, Oracle would be left with a hefty bill. However, demand is still soaring, and the contracted backlog provides a level of safety that makes Oracle an enticing buy.
As of Sept. 2, Oracle is trading around $145 per share, $200 below its all-time high. The AI boom isn't slowing, and Oracle has been repriced. Potential Oracle investors have an attractive entry point here.
