Overview
- Oracle shares have fallen 42% since their Sept. 10 high as investors question heavy AI infrastructure spending and rising obligations.
- For fiscal Q2 2026, non-GAAP EPS of $2.26 beat estimates while revenue grew 14% to $16.1 billion and missed consensus, and the company held to a $67 billion full-year revenue outlook.
- Capital expenditures surged to about $12 billion in the quarter with full-year spending guided near $50 billion, free cash flow was roughly negative $10 billion, and total debt including leases reached $124 billion, up 39% year over year.
- Barclays maintained an Overweight rating with a $310 target on Dec. 16, RBC cut its target to $250 with Sector Perform on Dec. 11, and the reported Street consensus stands at Moderate Buy with an average one-year target of about $309.
- Coverage cites a large AI backlog that reportedly includes a $300 billion OpenAI contract beginning in 2027, while HSBC projects OpenAI could remain free cash flow negative for years and require substantial external funding.