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Is Oracle an No-Brainer Buy After the Spectacular Investor Update? | ORCL Stock Analysis

Parkev Tatevosian, CFA•Sep 12, 2026

Summary

Parkev analyzes Oracle's recent performance, noting that the company's remaining performance obligations (RPO) have soared to $664 billion, placing it alongside cloud giants like Amazon and Microsoft. Parkev highlights that while revenue and operating income are growing strongly, the massive upfront costs of building data centers are creating a significant cash flow mismatch that investors must monitor. Parkev projects that the company will remain free cash flow negative until 2029 due to these intensive capital requirements.

ORCL: Parkev notes that Oracle reported revenue growth of 30% to $19.3 billion and a 57% increase in operating income, driven by high demand for data center capacity. Parkev points out that the company is successfully negotiating large prepayments from customers, receiving $11.3 billion in the latest quarter to help fund its $28.5 billion in capital expenditures. Although Oracle trades at a low forward P/E of 14, Parkev calculates a fair value estimate of $128 per share, which is below the current market price of approximately $160.

Mentioned Stocks

ORCL
Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev reiterates a buy rating with low conviction, noting that the company is seeing accelerating revenue growth and massive demand for AI infrastructure. Parkev is encouraged by the $11.3 billion in customer prepayments which helps de-risk the massive capital expenditures. However, Parkev notes a fair value estimate of $128 per share and expresses concern over projected negative free cash flow until 2029, which keeps his conviction level low despite a cheap forward P/E of 14.

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