Oracle (ORCL): Can Surging Cloud Revenue Outpace Its Financing Burden? Faheem Tahir Sat, November 14, 2026 at 2:29 PM EST 3 min read ORCL -2.96% ^IXIC -0.91% Trade Oracle on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We just published the list of the 10 AI Infrastructure Stocks to Watch After CoreWeave's Earnings and Oracle Corporation (NYSE:ORCL) ranked 8th on this list.
AI infrastructure stocks have faced considerable selling pressure in recent weeks, as concerns over data center expansion, rising borrowing costs, and regulatory uncertainty have weighed on investor sentiment. According to Bloomberg, hedge funds sold global technology shares during the week ending November 6 at a pace approaching the highest recorded in Goldman Sachs' data since 2016.
Much of the uncertainty stems from the U.S. midterm elections, which raised concerns about potential restrictions on data center construction. Reuters reported on November 5 that the Nasdaq Composite plunged 5.5%, while UBS analysts estimated that nearly 30% of anticipated U.S. data center capacity additions in 2028 could be at risk from potential construction pauses. The selloff also prompted Wall Street to reassess opportunities across the technology sector, as discussed in our recent coverage of 10 Stocks Analysts Just Upgraded.
Against this backdrop, the prominent AI cloud infrastructure provider offered some relief following its latest earnings announcement. On November 11, the company raised its annual revenue forecast and eased financing concerns by indicating that cash flows from existing contracts would cover its debt repayments. The developments also lifted other major AI infrastructure stocks.
However, the recovery proved short-lived as a leadership crisis at a major AI chipmaker introduced fresh uncertainty across the sector. On November 12, shares of the cloud infrastructure provider fell 9.1% after gaining more than 27% in the previous session, while the chipmaker declined 8.2% following its CEO's resignation amid an ongoing scandal.
Beyond these market swings, financing remains a concern. Reuters reported on November 12 that approximately 70% of record U.S. convertible bond issuance in 2026 was AI-linked, highlighting the industry's reliance on capital markets. Meanwhile, the selloff has renewed scrutiny of elevated technology valuations, a concern explored in our recent analysis of 10 High P/E Stocks Under the 200-Day SMA.
Oracle Corporation (NYSE:ORCL) is discussed here due to 86.90% analyst upside, as CoreWeave's results reinforced demand for the AI computing capacity offered through Oracle Cloud Infrastructure. Shares rose approximately 8.8% on November 11 as confidence returned to the sector.
Oracle Corporation is already translating that demand into revenue. Fiscal first-quarter cloud infrastructure sales increased 121% to $7.4 billion, helping total revenue grow 30% to $19.3 billion. Remaining performance obligations reached $664 billion, although converting those commitments into revenue requires substantial infrastructure investment.
The funding structure therefore matters as much as the backlog. Customer prepayments, customer-supplied hardware, and vendor financing reduce upfront cash requirements. Management expects positive free cash flow in the second half of fiscal 2028. Stephens supported this improving funding outlook on November 2, upgrading Oracle Corporation to Overweight and raising its target to $213 from $185. The company subsequently completed $10 billion each in stock and debt financing, illustrating the remaining cost to shareholders.
At approximately 15.8 times estimated fiscal 2027 adjusted earnings, Oracle Corporation trades below its five-year average forward multiple of roughly 22 times. Our coverage of why Oracle made the list of cheap stocks heading into 2027 examines the funding improvements behind that valuation case. The discount offers potential if contracted demand produces cash on schedule; further construction delays or financing needs would weaken that argument.
While we acknowledge the risk and potential of ORCL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years
Disclosure: None. Follow Insider Monkey on Google News.
