Key Takeaways
- Oracle shares have declined 25% in 2024 and 36% over the trailing 12 months
- The company reports fiscal quarterly results on September 10
- Jefferies reduced its price objective to $290 from $320 while maintaining optimism for shares trading at $145.75
- Fiscal 2026 revenue climbed 17%, driven by 39% cloud services expansion
- Outstanding debt reached $129.5 billion, raising investor concerns
Oracle (ORCL) shares currently trade at $145.75, representing a 25% decline since the start of the year and a 36% drop over the past year. The technology giant’s stock has retreated approximately 57% from its 52-week peak of $345.72.
This substantial decline has occurred even as Oracle posted 17% revenue growth in fiscal 2026. The company’s cloud business powered this expansion with impressive 39% growth, surpassing software to become Oracle’s primary revenue generator.
Market participants have grown increasingly concerned about Oracle’s financial obligations and infrastructure spending. Outstanding debt ballooned to $129.5 billion by May 31, up significantly from $92.6 billion twelve months prior. The company invested $55.7 billion in capital expenditures over the past year to expand its artificial intelligence infrastructure capabilities.
Additionally, Oracle maintains approximately $260 billion in off-balance-sheet commitments related to data center facilities, representing nearly triple its anticipated full-year 2027 capital spending.
The company’s order backlog has experienced rapid expansion. From last September through the present, backlog surged from $455 billion to $638 billion. Since September 9 of last year, Oracle accumulated $183 billion in new order backlog, compared to $138 billion on that same date.
A significant portion of initial market enthusiasm stemmed from a substantial multiyear $300 billion partnership with OpenAI revealed last year. However, market sentiment toward this arrangement has cooled as uncertainty emerged regarding OpenAI’s capacity to fulfill its financial commitments.
Jefferies Maintains Constructive Stance Despite Target Reduction
Analysts at Jefferies, under the direction of Brent Thill, lowered their price objective to $290 from $320 while preserving their positive outlook. The firm believes negative factors are largely reflected in current pricing, characterizing sentiment as “near peak negative sentiment.”
From the current $145.75 price level, Jefferies’ target implies potential gains approaching 100%. The analysts characterized the stock as “overly beaten down” with an attractive risk/reward profile.
Revenue growth on a quarterly basis accelerated from 12% to 21% throughout the fiscal year concluded in May 2026. Book value experienced dramatic growth, more than doubling from under $21 billion one year ago to $43.1 billion.
Oracle’s price-to-earnings multiple stands at 25, modestly below the S&P 500’s average of 30. This valuation gap provides potential for multiple expansion should investor sentiment improve.
Software Sector Rebounds Creating Momentum for Oracle
Oracle isn’t the only software company facing headwinds, but it may have distinct characteristics supporting a recovery. Salesforce (CRM) rallied more than 20% following its earnings release. Elastic (ESTC) and Okta (OKTA) experienced comparable upward movements. Snowflake surged 24% in pre-market trading Thursday after delivering second-quarter fiscal results.
This emerging trend of depressed software stocks rallying on quarterly results is generating increased focus on Oracle before its September 10 announcement.
Jefferies acknowledges persistent challenges remain. Infrastructure spending continues to accelerate while free cash flow stays in negative territory, and credit rating agencies are monitoring the situation closely.
Oracle is scheduled to announce earnings on September 10.
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