ORCL
Oracle
Summary
What they do:
Oracle operates the world's largest enterprise database business and the fastest-growing major cloud infrastructure platform (OCI), delivering compute, storage, GPU-accelerated AI services, and the Stargate AI data center partnership with OpenAI/SoftBank spanning 4.5GW+ of planned capacity.
Why they matter:
ORCL is the dark horse of AI infrastructure — OCI cloud infrastructure revenue grew 84% YoY to $4.9B quarterly with AI infrastructure revenue up 243%, backed by $553B in remaining performance obligations and the Stargate partnership that positions Oracle as a hyperscaler-grade AI compute provider alongside AWS, Azure, and GCP.
Recent performance:
Q3 FY2026 (Feb 2026) revenue $17.2B (+22% YoY); OCI cloud infrastructure $4.9B (+84% YoY); RPO $553B (+325% YoY). Stock ~$175, market cap ~$500B. FY2026 capex guided at $50B.
Our Verdict
The legacy database giant turned AI infrastructure powerhouse — OCI growing 84% with $553B in RPO and the $300B+ Stargate partnership with OpenAI validates Oracle's transformation, but 30% of total revenue is still legacy database licenses, $50B annual capex is untested at this scale, and the stock at 8x revenue already prices significant AI acceleration into a $500B market cap.
Structural trends
Structural
65
/ 100
Moat
7/10
Enterprise DB lock-in + Stargate + RPO depth
AI Exp.AI Exposure
High~30% AI
Play Type
EstablishedAI Growth
~84% YoY
Rel. Value
39
FAIRPriceLIVE
$163.00
+4.74%
Live via Yahoo Finance · refreshes every 5 min
Market Cap
$468.8B
P/E Ratio
29.3
P/S Ratio
7.3x
52W High
$345.72
52W Low
$121.24
52W Chg
34.4%
Beta
1.60
Oracle is a 47-year-old software company undergoing the most dramatic transformation in its history. Founded in 1977 by Larry Ellison, Oracle built the world's most widely deployed enterprise relational database — an estimated 30-40% of enterprise data sits in Oracle Database, deeply embedded in financial services, government, healthcare, and manufacturing. The database business generates tens of billions in recurring license and support revenue with margins above 80%, but growth has been flat to declining as customers shift to subscriptions.
The transformation is Oracle Cloud Infrastructure (OCI), launched in 2016 and now one of the fastest-growing major cloud platforms. OCI offers the same compute, storage, networking, and AI services as AWS/Azure/GCP, but differentiated by two things: native integration with Oracle Database (saving enterprises 30-50% vs. running Oracle workloads on competing clouds) and aggressive AI infrastructure buildout. Q3 FY2026 cloud infrastructure revenue reached $4.9B, growing 84% YoY, with AI infrastructure revenue specifically growing 243%. Oracle delivered 96,000+ NVIDIA Grace Blackwell GB200 units and approximately 400MW of data center capacity in Q3 alone.
The Stargate partnership is the defining strategic move. Oracle, OpenAI, and SoftBank announced a $300B+ partnership to build 4.5GW of AI data center capacity in the United States, with the flagship campus in Abilene, Texas already operational on OCI. Five additional Stargate sites have been announced, bringing total planned capacity to nearly 7GW and over $400B in investment. OpenAI confirmed as the anchor tenant at approximately $30B per year in cloud consumption. This single partnership transforms Oracle from a credible but distant fourth-place cloud into a hyperscaler-grade AI infrastructure provider.
Total company revenue for the twelve months ending February 2026 was $64.1B (+15% YoY), with total cloud revenue (IaaS + SaaS) of $8.9B quarterly (+44% YoY). RPO reached $553B, up 325% YoY — a staggering number driven by the Stargate deal and other hyperscale commitments from Meta, NVIDIA, and enterprise customers. Oracle guided FY2026 capex at $50B, roughly 5x its historical spending levels, funded by strong free cash flow generation and debt capacity.
Supply Chain Dependencies
Upstream Suppliers
Downstream Customers
The Catch
Oracle's fundamental challenge is capital intensity at unprecedented scale. The company has committed $50B in FY2026 capex — roughly 78% of its trailing twelve-month revenue — to build infrastructure for partnerships (primarily Stargate) that haven't yet generated proportional revenue. Oracle has decades of experience running enterprise software at 40%+ operating margins; it has zero experience running infrastructure buildouts at hyperscaler scale. The Stargate partnership with OpenAI is transformational but also concentrating: if OpenAI's compute needs shift (model efficiency improvements, competitive dynamics with Microsoft/Azure) or Stargate deployment faces regulatory/construction delays, Oracle faces a capital cycle mismatch — $50B spent, revenue deferred. Meanwhile, the legacy database business continues its slow decline as enterprises adopt PostgreSQL and cloud-native alternatives, creating a ticking clock on Oracle's transformation from software margins to infrastructure margins.
If They Win
If Oracle executes the Stargate buildout, scales OCI to $30B+ annual cloud infrastructure revenue, and converts even a fraction of the $553B RPO into recurring revenue, the company becomes the fifth hyperscaler — the enterprise cloud platform that owns the world's largest AI training infrastructure alongside the world's most widely deployed enterprise database. In this scenario, Oracle generates $100B+ in total annual revenue (up from $64B) with OCI comprising 40-50% of the mix, operating margins stabilize at 30%+ as infrastructure scales, and the Stargate partnership becomes a permanent competitive advantage that no other cloud provider can replicate. The stock trades at $350-400 as the market values Oracle at $1T+ — a recognition that the 47-year-old database company executed the most ambitious infrastructure transformation in enterprise technology history, turning Larry Ellison's bet on AI infrastructure into a new pillar of the company alongside the Oracle Database franchise.
Others in Run the Workload
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Amazon (AWS)
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Alphabet (Google Cloud)
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Meta Platforms
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DigitalOcean
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Not financial advice. All scores generated via AI algorithms using public data.