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Oracle shares lag peers despite strong operating metrics
Oracle stock is down 49% over 12 months, even as its 33% operating margin matches Alphabet, and management points to $638 billion in AI infrastructure RPO.
Oracle’s stock has fallen to the bottom of its peer group even as the company’s business performance sits near the top, highlighting a gap between market pricing and fundamentals, according to Yahoo Finance.
Over the past 12 months, Oracle shares have returned -49%, versus a +67% gain for Alphabet, while operating margin is roughly the same at 33%. Oracle’s revenue growth is 17.4%, and its price to earnings multiple is 20.2 times, figures that the outlet says leave investors pricing Oracle and Alphabet as if they operate in different realities.
The mismatch, Yahoo Finance adds, is tied to Oracle’s ongoing pivot toward becoming an infrastructure provider for the AI boom, backed by large capital spending. Management said Oracle signed $67 billion in AI infrastructure contracts in the quarter, lifting total remaining performance obligations, or RPO, to $638 billion.
Oracle also expects revenue growth of +34% in fiscal 2027, but the transformation comes with heavy costs. Yahoo Finance reports Oracle projects an expected net cash outlay for capital expenditures of about $70 billion in fiscal 2027 and plans to raise around $40 billion in debt and equity to fund the buildout.