In a volatile year for technology stocks, Oracle Corporation (ORCL) stands out as an attractive long-term investment opportunity. Despite a recent correction that has brought its share price down to around $188-$190 (as of December 17, 2025), a drop of more than 45% from its September highs, the company's fundamentals in the cloud and AI business are solid and promising. This decline reflects temporary concerns about high infrastructure spending, but the contract backlog and explosive cloud growth suggest significant upside potential.
Oracle has transformed its traditional database and enterprise software business into a key player in the AI-powered cloud. In its second fiscal quarter of 2026 (ending November 2025), total revenue grew 14% to $16.1 billion, while cloud revenue (IaaS + SaaS) increased 34% to $8 billion, now representing half of total revenue. The 68% growth in cloud infrastructure (IaaS) stands out, reaching $4.1 billion. This surge is driven by large contracts with customers such as OpenAI, Meta, and other hyperscalers.
The most compelling indicator is Remaining Performance Obligations (RPO), which measures signed but not yet recognized contracts as revenue: an impressive $523 billion, a 438% year-over-year increase. This provides exceptional visibility into future revenue, with projections that Oracle Cloud Infrastructure (OCI) business could multiply in the coming years. Wall Street analysts maintain a "Buy" consensus, with average price targets between $300 and $312, implying a 60-65% upside from current levels. Some targets even reach $400.
Although capital expenditure (capex) has risen to approximately $50 billion for the current fiscal year—primarily in data centers and GPUs for AI—this is a necessary investment to capture the insatiable demand for cloud capacity. Oracle has signed commitments worth hundreds of billions in leases and contracts, but its "chip neutrality" strategy (working with Nvidia and other vendors) and multi-cloud alliances (with AWS, Google, and Azure) position it to scale efficiently. In the long term, these expenditures will translate into high margins once the capacity is operational.
In short, the current correction has left Oracle with a more reasonable valuation (P/E around 35, a premium justified by growth), while the AI boom remains undiminished. Companies like Oracle, with their massive backlogs and leadership in enterprise cloud, are poised to lead the next phase of technology gains. If you're looking for exposure to AI and cloud with years of visibility, buying ORCL now could be a smart move. Remember to diversify and consult with a financial advisor, as markets are volatile.
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