Table of Contents
Quick Read
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Oracle’s $638 billion contracted backlog jumped 363% year-over-year, yet the stock trades at a forward P/E of just 18.
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Microsoft and Amazon trade at forward P/Es of 24 and 22 with PEGs above 1.3, making Oracle’s multicloud tollbooth position the discounted alternative.
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Oracle carries $124.7 billion in debt and negative free cash flow, but $75 billion in pre-contracted FY2027 deals cushions the execution risk.
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Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Oracle didn’t make the cut. Grab the names FREE today.
I keep adding to my research position in Oracle (NYSE:ORCL) every time the stock gives me a chance, and I am not slowing down. The stock sits at $142.45 after falling 39.05% over the past year, and that is precisely what pulled me in. The market is treating Oracle like a leveraged bet gone wrong. I read the same filings and see something the crowd is missing: the widest asymmetry I have found in enterprise software.
What The Contract Backlog Is Telling Me
Oracle finished Q4 FY2026 with remaining performance obligations of $638 billion, up 363% year over year. Cloud infrastructure revenue grew 93%, global GPU utilization ran at 97.5%, and Safra Catz laid out an OCI ramp from $18 billion this year to $32 billion, $73 billion, $114 billion, and $144 billion over the following four years. Most of that revenue is already contracted. Management reaffirmed a 31% revenue CAGR and 28% EPS CAGR through fiscal 2030. That is the kind of visibility I rarely find at a forward P/E of 18 and a PEG of 0.83.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Oracle didn’t make the cut. Grab the names FREE today.
Why My Money Skips Azure And AWS
The obvious alternatives are Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). Both are excellent businesses already priced as fortress compounders. Microsoft trades at a forward P/E of 24 with a PEG of 1.57, and Amazon carries a forward P/E of 22 and a PEG of 1.39. Neither multiple leaves room for surprise. Oracle’s Multicloud AI Database grew 404% in Q4 because its databases now sit inside AWS, Azure, and Google Cloud, with 72 multicloud datacenters more than halfway complete. I am buying the tollbooth the hyperscalers are hosting for me, at a discount to the hosts.
Balance Sheet Fear I Have Already Priced In
The bear case is plain. Free cash flow ran negative $23.69 billion in FY2026, capex hit $55.66 billion, non-current debt climbed to $124.7 billion, and Oracle plans to raise roughly $40 billion in FY2027 through debt and a $20 billion at-the-market equity program. Reddit noticed. A thread flagging Larry Ellison’s 346 million pledged shares pulled 1,641 upvotes. That is the actual risk: if AI capex demand stalls, Oracle absorbs execution friction and dilution. I accept that trade. Paying MSFT and AMZN multiples for less asymmetry is the deal I walk away from.
