Research note · 7 October 2026

Oracle Corporation ORCL

LONG price $143.56 · base case $183.43 · expected +24% over 540 days

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The call

Oracle trades at 22.5x trailing diluted EPS ($6.38 TTM), well below its five-year P/E range of 29.84x–38.73x, because the market treats the $75.7B TTM capex as a permanent margin burden rather than a front-loaded data-center build-out. The evidence contradicts that reading: remaining performance obligations grew $209B YoY to $664B, Q1 FY27 cloud revenue rose 62% and cloud infrastructure 121%, and management guides FY27 revenue to at least $90B with non-GAAP EPS of $8.10. Applying a 25x multiple to forecast EPS of $7.34 (15% growth) yields a base-case value of $183.43, 27.8% above the $143.56 price. The bear case at 18x gives $132.07, an 8% downside, so the asymmetry favors the long.

Why the opportunity exists, in the desk's view: a cyclical trough.

What decides the case

• Capex intensity and FCFF turnaround
• Cloud revenue mix and margin

Model-authored research with an editorial gate; every figure traces to the filing or a stated assumption and every calculation was reproduced before publication. Not investment advice. Do not redistribute.