Investors have been reminded recently that Oracle AI data center funding is not a simple, risk-free growth story. Shares of Oracle Corporation (NYSE:ORCL) sold off sharply after the company delivered mixed earnings results and revealed a major increase in its capital spending plans. Management now expects capital expenditures to reach roughly $50 billion in fiscal 2026, a level that caught the market off guard and reignited concerns about debt, cash flow, and execution risk.
The pressure intensified after reports suggested that a key $10 billion financing arrangement with Blue Owl Capital for a new Michigan AI data center had stalled. Oracle stock dropped about 12% after earnings and then slid another 6% following the funding news. With the global data center market projected to generate more than $527 billion in revenue in 2025, big tech companies are racing to lock in AI capacity. For Oracle, however, the Michigan project has turned into a test case for whether its ambitious expansion plans can be funded without straining the balance sheet.
With ORCL now well below its 52-week high, investors are asking a familiar question: is this weakness a warning sign to sell, or a long-term buying opportunity?
How Strong Is Oracle’s Core Business?
Despite near-term volatility tied to Oracle AI data center funding, the company’s underlying business remains substantial. Oracle is a global enterprise technology leader, selling databases, cloud infrastructure, SaaS applications, and AI-driven analytics to corporations and government agencies worldwide.
Over the past month, Oracle shares are down roughly 15%, reflecting investor unease around the Michigan project and rising capital intensity. Zooming out, however, the stock is still up about 14% over the past 52 weeks, showing that the market continues to believe in Oracle’s cloud and AI strategy.
From a valuation standpoint, Oracle trades at a forward price-to-earnings ratio of around 33x, above the broader tech sector average near 24x. That premium suggests investors are still pricing in strong long-term growth. Oracle also offers income support through a dividend, currently yielding about 1.9%, with a quarterly payout of $0.50 per share and a forward payout ratio near 33%.
Financially, Oracle’s fiscal 2026 second-quarter results highlighted why the long-term thesis is still alive. Total revenue climbed 14% year over year to $16.1 billion. Cloud revenue surged 34% to $8 billion, with Cloud Infrastructure (IaaS) up 68% and Cloud Applications (SaaS) up 11%. GAAP earnings per share jumped 91% to $2.10. Most striking was remaining performance obligations, which soared to $523 billion, up 438%, signaling massive committed future demand.
What’s Driving Oracle Beyond Data Centers?
While Oracle AI data center funding headlines dominate, the company continues to push innovation across multiple fronts. In healthcare, Oracle Health and Life Sciences is targeting oncology through a partnership with the Cancer Center Informatics Society (Ci4CC). The collaboration aims to co-design an electronic health record tailored to cancer care and connect everyday oncology practice with clinical research. By combining clinical and genomic data and applying AI, Oracle hopes to accelerate drug development, clinical trials, and precision medicine.
On the enterprise software side, Oracle recently launched the Oracle Fusion Applications AI Agent Marketplace. This platform allows Oracle Fusion Cloud customers to deploy validated, partner-built AI agents directly within their existing workflows, lowering barriers to AI adoption and increasing stickiness.
Oracle is also expanding its manufacturing and supply chain footprint through a collaboration with Microsoft Corporation (NASDAQ:MSFT). The two companies are integrating Oracle Fusion Cloud Supply Chain and Manufacturing with Azure IoT Operations and Microsoft Fabric. The goal is to feed real-time production data into enterprise systems, automating workflows and improving decision-making across global supply chains.
What Lies Ahead for ORCL Stock?
Looking forward, analysts expect quarterly EPS of $1.35 in the next report, rising to $1.55 the following quarter. For fiscal 2026 as a whole, consensus EPS estimates sit around $5.82, implying year-over-year growth of more than 30%. Those numbers suggest Oracle’s earnings power could accelerate if execution remains strong.
Wall Street opinion is mixed but generally supportive. Bank of America analyst Brad Sills maintains a “Buy” rating, though he trimmed his price target to $300, arguing Oracle is entering its largest AI infrastructure build-out phase. JPMorgan analyst Mark Murphy is more cautious with a “Neutral” rating and a $230 target, but still views Oracle as a key beneficiary of AI infrastructure demand. Overall, the consensus rating among analysts is a “Moderate Buy,” with an average price target near $306.
Bottom Line
Concerns around Oracle AI data center funding and aggressive capital spending make ORCL stock riskier in the near term, and this is not a setup that demands blindly buying the dip. However, the company’s fast-growing cloud business, massive backlog, and expanding AI ecosystem suggest the core story remains intact. For long-term investors who can tolerate volatility, the recent pullback looks more like a pause in a larger growth narrative than a clear signal to sell.
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