Key Insights
- Oracle’s long-term debt has surged approximately 66% since the beginning of 2025.
- The corporation is strategically investing in artificial intelligence, a move that is yielding promising results thus far.
Oracle (NYSE: ORCL) is embarking on an audacious endeavor, a decision that has left investors somewhat apprehensive.
This conclusion is underscored by the fact that, as of the current date, the stock has plummeted 55% from its peak 52-week value. Despite this, the firm’s significant investment appears to be materializing as intended. Below is a comprehensive overview.
Oracle’s Commitment to Artificial Intelligence
Artificial intelligence (AI) has emerged as the newest technological frontier, with widespread belief in its potential to reshape society profoundly.
Given that AI could substantially influence Oracle’s enterprise application sector, it is eminently sensible that the company is striving to capitalize on this trend. Currently, it is establishing the essential infrastructure to support AI deployment.
Investing in AI infrastructure necessitates considerable initial expenditures. This substantial financial commitment explains, in part, the alarming nearly 66% rise in Oracle’s long-term debt since the onset of 2025.
Such a marked escalation within a short timeframe understandably raises investor concerns. However, the narrative surrounding this technology titan’s investment in AI remains largely optimistic.
Significant Progress Made, Yet More Lies Ahead
To begin with, Oracle’s cloud infrastructure revenue surged by 84% year on year in the fiscal third quarter of 2026. With an impressive figure of $4.9 billion, this is far from negligible. In essence, the company’s substantial commitment to AI infrastructure is already beginning to bear fruit.
Moreover, Oracle’s remaining performance obligations—essentially a measure of its backlog—soared by 325% year over year, culminating at an astonishing $553 billion.
While it is conceivable that some projects may not materialize as anticipated, it is evident that a multitude of clients are enthusiastically collaborating with Oracle to develop their AI initiatives.
Although it may be premature to assert that Oracle’s strategy of leveraging debt to pivot towards AI has completely yielded its dividends, there is no denying that the technology sector is responding favorably to the firm’s proactive actions, even in the face of Wall Street’s skepticism.
Evaluate the Risks, Yet Oracle Appears Reasonably Priced
Oracle stands as a venerable pillar in the technology landscape, boasting a rich legacy. Unlike fledgling AI startups scrambling to harness nascent technologies, Oracle presents itself as a solid, enduring contender.
Long-term investors may find merit in scrutinizing this entity, especially in light of its burgeoning AI operations and expansive backlog.
Furthermore, with the recent sharp drop in stock price, the equity appears more attractively priced compared to its valuation over the past several years, evidenced by its price-to-sales and price-to-earnings ratios sinking below historical averages.
Is Now the Right Time to Invest in Oracle?
Before contemplating an investment in Oracle’s stock, it is prudent to reflect on the following:
The Motley Fool Stock Advisor team has recently unveiled its selection of the 10 most promising stocks available for acquisition now, and Oracle does not feature among them. The stocks that made the list are predicted to offer significant returns in the forthcoming years.
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