Oracle (NYSE:ORCL) shares have tumbled 36% from their $345.72 peak, sparking renewed debate among investors. The pullback highlights concerns around the company’s heavy investment in artificial intelligence (AI) infrastructure, raising questions about the long-term Oracle stock forecast.
Why ORCL Is Sliding
Oracle’s aggressive expansion into AI and cloud services has required billions in capital expenditures. While these investments position the company for growth, they also pressure profit margins and free cash flow in the near term. Coupled with a significant debt load, investors worry about the pace at which Oracle can convert these outlays into sustainable profits.
The broader market sentiment has also influenced ORCL’s decline. Across tech, doubts are rising about whether large-scale AI spending will deliver the projected returns. Oracle’s leadership has signaled that cloud and software spending will continue rising through fiscal 2026, as the company scales data centers and cloud capacity to meet growing enterprise demand.
Oracle’s AI and Cloud Momentum
Despite near-term headwinds, Oracle’s long-term prospects remain strong. Demand for AI infrastructure continues to expand, with the company reporting remaining performance obligations (RPO) of $455.3 billion as of August 31, 2025. Management anticipates steadily converting this into revenue over the next decade, with roughly one-tenth expected in the next 12 months.
Oracle Cloud Infrastructure (OCI) is a major driver. In the first quarter, cloud revenue rose 27% to $7.2 billion, while cloud infrastructure climbed 54% to $3.3 billion. OCI demand is outpacing capacity, growing 57% year over year. With multibillion-dollar contracts in the pipeline, Oracle is approaching a half-trillion-dollar backlog, signaling strong enterprise appetite for AI-ready cloud solutions.
Oracle’s database segment also shows impressive growth. Annualized revenue reached nearly $2.8 billion, a 32% increase YoY, while the Autonomous Database expanded 43%. Notably, multi-cloud database services surged 1,529%, reflecting deep integrations with Amazon Web Services (NASDAQ:AMZN), Microsoft Azure (NASDAQ:MSFT), and Google Cloud (NASDAQ:GOOG) that position Oracle as a central player in flexible, cross-cloud architectures.
Management anticipates OCI revenue rising 77% this fiscal year to $18 billion, with continued growth expected as AI workloads accelerate. Oracle currently operates 34 multi-cloud data centers, with 37 more planned, bolstering its hybrid and multi-cloud leadership.
Is Oracle Stock a Buy, Sell, or Hold?
The Oracle stock forecast suggests a strong long-term growth trajectory fueled by AI and cloud adoption. However, short-term free cash flow may remain pressured due to ongoing investments in data-center expansion.
ORCL trades at a forward P/E of 41.2x, which is high relative to expected earnings growth of 23.4% in fiscal 2026 and 17.7% in fiscal 2027. Analysts note that much of the AI optimism is already priced in, leaving limited margin for error.
Wall Street currently rates Oracle stock a “Moderate Buy”, reflecting confidence in long-term AI tailwinds but caution regarding short-term volatility. For long-term investors, the recent pullback could be an opportunity to enter at a lower price. Short-term traders, however, may want to wait until Oracle converts its AI investments into tangible earnings and secures additional AI contracts.
Bottom Line
Oracle’s transformation into an AI and cloud infrastructure powerhouse is progressing, but the journey involves near-term risks. The Oracle stock forecast points to substantial long-term potential, balanced by elevated valuations and the need for patience as AI investments mature.
Looking ahead, Oracle’s growth could accelerate further through strategic AI partnerships, expanded multi-cloud offerings, and increased adoption of its Autonomous Database solutions. New contracts with enterprise clients and governments, combined with advancements in machine learning and data analytics, may unlock additional revenue streams. Investors who stay focused on these long-term catalysts could benefit as ORCL leverages its scale, technology leadership, and AI-ready infrastructure to capture market share in an increasingly competitive cloud and enterprise software landscape. As Oracle continues executing its AI and cloud strategies, improved operational efficiency and global expansion could further strengthen margins and enhance shareholder value.
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Author Stephanie Bédard-Châteauneuf 
