Is ORCL a good stock to buy? We came across a bullish thesis on Oracle Corporation on Beyond The Hype – Looking Past Management & Wall Street Hype’s Substack by Beyond The Hype and Shilpa Reddy. In this article, we will summarize the bulls’ thesis on ORCL. Oracle Corporation’s share was trading at $211.82 as of June 8th. ORCL’s trailing and forward P/E were 38.36 and 26.60 respectively according to Yahoo Finance.
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Oracle Corporation offers products and services that address enterprise information technology environments worldwide. ORCL delivered a strong Q3 FY2026 performance, reporting revenue of $17.19B, up 22% YoY, and non-GAAP EPS of $1.79, up 21% YoY, with underlying demand trends reinforcing its positioning in AI-driven cloud infrastructure.
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Remaining Performance Obligations surged to $553B, while AI Infrastructure revenue grew 243% YoY and Multicloud Database expanded 531% YoY, highlighting accelerating adoption from hyperscalers and model providers. Coming into the print, investor focus centered on whether Oracle could sustainably fund its aggressive AI infrastructure expansion without stressing the balance sheet amid rising capital intensity.
Management addressed this directly, citing a successful $30B oversubscribed debt and convertible preferred issuance, while emphasizing that most large AI contracts are either customer-prepaid or supported via customer-supplied GPUs, significantly reducing incremental capital burden. This effectively reframes Oracle as a capital-light AI infrastructure beneficiary, although it shifts the business mix toward lower value capture and pressures margins, with consolidated non-GAAP operating margins compressing 135 bps to 43% due to mix shift and capacity buildout.
Cloud momentum remained robust, with IaaS growing 84% YoY and total cloud revenue accelerating to 44% YoY, while FY27 revenue guidance was raised to $90B, strengthening long-term visibility. However, increasing reliance on a concentrated set of large AI contracts introduces customer concentration and execution risk. On the operational front, Oracle expanded capacity beyond 10GW, with 90% partner-funded, and reduced rack-to-revenue timelines by 60%, signaling improving execution efficiency. AI infrastructure margins are currently around 32% on delivered capacity, with potential upside as scale improves, though long-term economics may remain structurally capped if customer-funded capex persists.
The SaaS segment is positioned as AI-resilient through embedded agent workflows and AI-assisted development, but competitive pressure from low-cost software creation remains a structural risk. Importantly, the remaining $20B ATM equity program creates a dilution overhang but preserves financing flexibility. Overall, Oracle is evolving into a high-risk, high-reward AI infrastructure platform, with meaningful upside tied to execution and backlog conversion, and potential rerating if profitability stabilizes alongside accelerating FY27 growth visibility.
Previously, we covered a bullish thesis on Microsoft Corporation (MSFT) by Long-term Investing in February 2025, highlighting strong cloud and AI-driven growth across Azure and Microsoft 365 despite concerns on AI capex and low-cost model competition like DeepSeek. MSFT’s stock has been flat since our coverage. Beyond The Hype and Shilpa Reddy share a similar view but emphasize Oracle Corporation (ORCL)’s capital-light AI infrastructure buildout via prepaid contracts and partner funding, alongside margin compression and execution risks.
Oracle Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 115 hedge fund portfolios held ORCL at the end of the first quarter which was 111 in the previous quarter. While we acknowledge the risk and potential of ORCL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ORCL and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
