why everyone is sleeping on oracle right now full dcf breakdown and why orcl is an easy 200% and more in the long term from here.
i spent the last few hours diving deep into oracle's recent FY2026 10-k and latest 10-q filings because the market is completely blind to what is actually happening under the hood. if you look at the math and actual financials from 2025 and 2026, this stock is primed for a 200% profit if you get in right now.
right now the current stock price is sitting around $125.84 per share, dropping hard from its 52-week highs near $345 because Wall Street is freaking out over heavy AI spending and data center buildouts.
look, i want to be realistic here – even though current prices are a steal, there are still risks that the price could keep dropping toward $90usd or so if macro volatility stays nasty or if near-term capex fears drag it down further. a temporary 30% drop is totally possible in the short term. but the win ratio on this setup is insanely high, giving you essentially a 200% profit upside long-term against that temporary downside.
lets talk raw data from the reports. oracle just closed out fiscal year 2026 with $67.4 billion in total revenue, up 17% from $57.4 billion in fiscal 2025. cloud infrastructure (oci) blew past expectations, growing 77% year over year to $18.1 billion, with Q4 oci alone surging 93% to $5.8 billion. but the single craziest stat from their Q4 10-Q / 10-K disclosures is their remaining performance obligations (rpo), which skyrocketed to $638 billion. that is $638B in contracted revenue backlogged and ready to convert into cash as their multi-cloud deals with microsoft, google, and aws keep scaling up.
when you look at enterprise value and multiples based on the current $125 price, oracle's ev is sitting around $545 billion to $560 billion against FY2026 non-gaap operating income / ebitda of $28.9 billion (up 16% from $25.0 billion in FY2025). that puts their ev/ebitda multiple at roughly 18x to 19x, which is absurdly cheap for a company growing cloud infra at over 90% while legacy tech plays trade at 30x+ multiples. operating cash flow for 2026 hit a record $32.0 billion, up 54% from $20.8 billion in 2025. free cash flow took a hit because they dumped over $40 billion into datacenter capex to buy GPUs and expand capacity, but that capex converts straight into massive recurring cloud revenue.
doing a discounted cash flow (dcf) calculation on this – if you model out their baseline free cash flow once datacenter capex normalizes over the next 3 to 5 years, plug in a conservative 22% cloud revenue cagr backed by that huge $638B rpo backlog, use an 8.5% wacc and a 3.5% terminal growth rate, the intrinsic value comes out way higher than where shares trade today at $125. even when factoring in their $85 billion in total debt and recent note offerings, the dcf model proves that orcl is severely undervalued and buying at current prices easily sets you up for a 200% gain as high-margin cloud revenue flows down to net income.
the market is panicking over near-term capex and debt needs, but they are totally ignoring that oci is becoming the core cloud backbone for big tech ai workloads while printing record non-gaap eps of $7.63 in FY2026 (up 27% from $6.03 in FY2025). this thing is going to compound like crazy.
Posted by spyapple
4 Comments
Imagine getting lost in the “perfect” math and forgetting they are a dinosaur that fomo’d into compute like a jackass and has no money to show for it.
One argument for the low price:
The plan is capex for debt. Currently there is only debt, the debt dillutes the asset value of Oracle. Further some people are disturbed by the fact that Oracle issues bonds to finance third parties – OpenAI and Anthropic.
On argument to keep ORCL:
the debt allows greater capex, that allows greater return of invest. The return of invest would be renting out raw datacenter capacity or AI as a service. And we see one after another company blocking new subscription because of hardware capacity limits.
The Oracle datacenters would be operational in 2028, then the “return of invest” should show up.
One of the investment top level managers which they do frequently interview at Bloomberg TV said that their focus is on the return of invest. However when institutionals keep ORCL then the market becomes thin, and when the retail type of trader sells in a rush and many of them do so then the price gets below a lot of levels.
My own buy in is aroud $150, and ORCL is currelby the worst position in my portfolio. But I keep it on the long term, like IBM – IBM pays quite good dividends (3 times higher than Oracle) and they are deep in quantum computing, they have tehir mainframe business, their services department and finally the software (Oracle database, middleware, business applications, and Java ). On IBM I am down for around 3%, on Oracle 20%
The AI trend is kinda insane. It’s pretty much make or break for the market. Companies like Google, Oracle, AWS, Microsoft, etc are spending an ABSURD amount of money on these data centers buildouts for compute, but then you have OpenAi revenue at 25b with 700b worth of commitments. That is the shit that worries me with Oracle and their 300b commitment in 2027. Not saying it won’t work, there’s certainly smarter people at the helm in the companies listed above, but it is a real fear that revenue growth won’t keep up with the bills. I’ll be on the sideline on this one, but I admire the play. Good luck man!
I’m Proud to be a bag holder. I might put some more in once the psky merger goes through. I guess Larry is personally backing the deal and if the merger drags on that’s alot of cash he’s got to put up for psky when if Oracle ever needs it it won’t be there. Oracle has a lot of obstacles to overcome to get those data centers built. They have to put up collateral on one center because their credit rating dropped and their Mexico center was denied running a dedicated natural gas line the second time. I still think the stock has more room to fall. But yeah if they pull it off this is a 500-1000 stock in 5 years.