A $2.2 Billion Reason to Buy Oracle Stock Here

Shares of software giant Oracle Corporation (ORCL) have faced a brutal selloff lately, even though the company’s fundamentals remain pretty much intact. Even as the software giant continues to deliver record revenue and explosive cloud growth, investors have been heading for the exits, worried that Oracle’s aggressive artificial intelligence (AI) spending could come back to haunt it. The concern isn’t that demand is fading. It’s that Oracle is spending at a breathtaking pace to keep up with it. Billions of dollars are being poured into expanding its cloud infrastructure, pushing capital expenditures to record highs.

That spending has pushed free cash flow into negative territory and forced the company to rely on debt and equity financing, raising concerns about whether its AI investments will generate strong enough returns. Investors are also keeping a close eye on Oracle’s rapidly growing backlog. While it reflects robust demand, much of the recent surge has been driven by a small number of large AI customers. Those mega deals have fueled impressive growth, but it also means Oracle is increasingly dependent on a small group of deep-pocketed clients to keep the momentum going.