Oracle’s Worst Month in 36 Years Sets Up a Collision Between AI Euphoria and Hard Cash Realities
Veröffentlicht: 07.07.2026 um 13:31 Uhr, Redaktion boerse-global.de
A 35% tumble in June wiped out a decade’s worth of gains for Oracle, handing the software giant its bleakest monthly performance since 1990. But the moment the selling stopped, two major Wall Street firms stepped in with emphatic buy calls, triggering a 2.3% rebound on Monday and opening a new chapter in one of the market’s most polarized debates.
Piper Sandler analyst Billy Fitzsimmons reaffirmed his overweight rating and $225 price target, pointing to Oracle’s cloud infrastructure business as a source of “significant upside.” William Blair went a step further, adding the stock to its Conviction List. The timing was striking: before Monday’s bounce, Oracle had closed lower for nine consecutive sessions, its longest losing streak since 2021. From its September all-time high of $280.70, the shares have now shed more than 55%, settling at around €125.70 ($140.27). The 14-day relative strength index hovers just above 30, a level that often precedes a technical bounce.
Behind the analyst enthusiasm sits a backlog that has ballooned to $638 billion — roughly 1.6 times Oracle’s current market capitalization. That mountain of contractual commitments includes a $300 billion deal with OpenAI, a testament to the near-insatiable demand for Oracle Cloud Infrastructure. Chief Executive Clay Magouyrk disclosed last quarter that the company booked $67 billion in AI infrastructure contracts alone, plus an additional $75 billion in customer prepayments and bring-your-own-hardware arrangements. “This is a trillion-dollar-a-year market,” he said of AI infrastructure.
Yet the price of chasing that prize has become stark. Oracle spent $55.7 billion on capital expenditures in fiscal 2026, and the figure could reach $95 billion next year. The resulting cash burn dragged free cash flow to negative $23.7 billion. Total debt has swelled to roughly $130 billion, and the company plans to raise another $40 billion through debt and equity in the coming fiscal year — $20 billion of which has already been placed via a stock sale. eMarketer analyst Jacob Bourne captured the tension: “The demand is real. But the financing question is going to get harder, not easier.”
Should investors sell immediately? Or is it worth buying Oracle?
Some early warning signs are already flickering. UBS data shows roughly 60% of companies are reining in AI spending as they impose stricter internal budgets. Meanwhile, internal reports from the U.S. Treasury Department have reportedly drawn parallels between the current AI investment frenzy and the speculative excesses of the dot-com era — a comparison that gains weight as Oracle’s interest payments on that $130 billion pile mount.
Piper Sandler’s vision for Oracle increasingly resembles a “high-tech utility.” The firm estimates that activating 2,400 megawatts of new capacity could generate an additional $2.2 billion in OCI revenue, pushing the division’s total to $41.1 billion — enough to offset cooling demand elsewhere in the software portfolio. But converting that potential into actual cash flow remains the sticking point. The company’s free cash flow needs to turn positive before skeptics can be convinced that the growth story is self-sustaining.
For income-oriented investors, the near-term calendar offers a concrete event: the ex-dividend date is July 10, with a quarterly payout of $0.50 per share due on July 24. But the larger drama hinges on whether Oracle can transform its staggering backlog into recurring revenue faster than its debt costs erode the gains.
Oracle at a turning point? This analysis reveals what investors need to know now.
Wall Street, for now, is betting it can. Of the 32 analysts covering the stock, 28 rate it a buy, four say hold, and none recommend selling. The consensus price target implies roughly 88% upside from the last close of $140.27, though a separate survey puts the target at €220.67. That optimism will be tested in the coming quarters, as Oracle needs to show that the infrastructure spending spree is laying the foundation for sustainable cash generation — not just adding to a debt burden that could become crushing if the AI boom cools. The stock may have found a floor, but the basement is still being poured.
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