Key Takeaways
- Oracle is up 12% in the past week after its Investor Day dated positive free cash flow and capped new raises at $20 billion.
- Its $30 billion free cash flow target for fiscal 2029 is far above the $5.9 billion consensus.
- Tuesday’s deals bring Alphabet’s Google chips, NVIDIA’s systems and Cerebras’ inference to Oracle’s cloud.
- OpenAI’s share of the backlog is the main risk, but at a below-average P/E, Oracle is a buy for patient investors.
Oracle (ORCL) stock is up 12% in the past week, after its Investor Day finally said when the cash comes back.
Tuesday set it up, with deals to offer Google TPUs from Alphabet (GOOG), NVIDIA (NVDA) superclusters and Cerebras (CBRS) inference on Oracle’s cloud.
Oracle finally put a date on it
On the Sept. 10 call, CFO Hilary Maxson still had no date for positive free cash flow: “We haven’t given a particular time frame on that yet.”
Oracle had $23.7 billion of negative free cash flow in fiscal 2026 and raised about $50 billion from February to August.
Oracle’s Investor Day release changed that:
- Positive free cash flow in the second half of fiscal 2028 and $30 billion+ in fiscal 2029
- New raises through fiscal 2030 capped at $20 billion, half equity and half debt
- Net debt, vendor financing included, below 3.5x adjusted EBITDA in fiscal 2029
Consensus has two more years of negative free cash flow, then just $5.9 billion in fiscal 2029:
$20 billion is a lot less than feared
On Tuesday, Evercore estimated Oracle might need another $50 billion to $60 billion for its AI buildout. The cap is less than half that, with vendor financing, customer-provided hardware and prepayments covering the rest.
TIKR tracks 43 analysts on Oracle. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Oracle, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Oracle’s Analyst Ratings
Wins for Google and Cerebras, a question for NVIDIA
Oracle is the first hyperscaler outside Google to sell Alphabet’s TPUs. Cerebras gets a sales channel that doesn’t run through OpenAI, which accounts for much of its $25.4 billion of contracted revenue.
Oracle’s NVIDIA superclusters are headed to multi-gigawatt scale, but Oracle’s capex steps down in fiscal 2029. Do NVIDIA’s Oracle sales peak with it?
Is Oracle a buy after the bounce?
Oracle went into Wednesday at 15x forward earnings, far below its 21x five-year average:
Wednesday’s jump takes it to about 17x, or about 7x management’s $21 fiscal 2030 EPS target.
The risk: S&P puts OpenAI at about half of Oracle’s backlog.
My take: with funding capped, it comes down to delivery, and at these prices Oracle’s a buy for patient investors.
The first test is second-quarter results in mid-December, where non-GAAP operating margin needs to hold near the first quarter’s 42%.
So what is Oracle stock actually worth?
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Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
