Key Takeaways
- Oracle shares fell 7% today as Democrats’ sweep of Congress hit stocks tied to the AI build-out, Everpure included.
- Oracle just sold 86.2 million new shares at $116 apiece, using up its cap on new raises through fiscal 2030.
- Analysts still expect Oracle’s earnings to climb, and the stock trades well below its five-year average forward P/E.
- Oracle relies on outside money, so a slower build-out would hit it harder.
Oracle (ORCL) fell 7% today as investors dumped stocks tied to the AI build-out after Democrats won both chambers of Congress. That leaves it below the $116 a share it got for the new shares it sold this week.
The build-out’s suppliers fell harder. Everpure (P) sank 16%, with no news of its own.
Yahoo Finance markets reporter Jared Blikre tied the selloff to candidates in both parties taking aim at AI data centers during the campaign, and wrote: “For the rest of AI software, Washington is the new worry.”
Chip stocks sold off too. ASE Technology (ASX) sank 21% with no news from ASE, and United Microelectronics (UMC) dropped 17% the morning it reported October revenue up 18.33% from a year earlier. Investors weren’t selling on results.
Analysts still see earnings growth
Analysts expect Oracle’s normalized EPS to climb from $7.63 in fiscal 2026 (the year to May) to $11.08 in fiscal 2028.
Congress hasn’t touched a contract in Oracle’s $664 billion backlog, so I don’t expect those estimates to fall on the election alone.
Oracle trades at 14x forward earnings, against a five-year average of 21x.
At today’s price, it’s even lower.
TIKR tracks 41 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
But Oracle needs outside money
Oracle’s free cash flow went from $11.8 billion in fiscal 2024 to negative $23.7 billion in fiscal 2026 as it poured cash into data centers.
So it pays for the build with debt and stock. Total debt, leases included, reached $169.1 billion at Aug. 31, and this week’s $20 billion stock and bond sale used up the raise cap it set at its Oct. 28 Investor Day.
Oracle plans for free cash flow to turn positive in the second half of fiscal 2028, and any delay, from Washington or anywhere else, means it collects later on a build it has already paid for.
The way I see it, the market is pricing in a political risk that hasn’t reached Oracle’s backlog or estimates, and at this multiple, that’s an overreaction. Of course, Oracle has little room for a slip. Its mid-December results are the next test.
So what is Oracle stock actually worth?
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