{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "ORCL",
  "name": "Oracle Corporation",
  "url": "https://frontierpicks.com/dossiers/ORCL/",
  "json_url": "https://frontierpicks.com/dossiers/ORCL.json",
  "status": "WATCHLIST",
  "current_conviction": "LOW",
  "archetype": {
    "code": "a4",
    "n": 4
  },
  "current_thesis": "Oracle's shares look more likely to lag the S&P 500 over the next three months, as Microsoft's exit from rented capacity, a scrapped Tencent lease and heavy cash burn outweigh a peer-led rebound. The fiscal second-quarter 2027 report, expected around 10 December 2026, shows whether the $664 billion backlog holds.",
  "invalidation_trigger": "A daily close above $145, over the 2026-10-28 Investor Day adjusted close of $144.54 and the 50-day moving average, which would show the shares leading again. A fiscal second-quarter 2027 report with remaining performance obligations above $664 billion and a raised fiscal 2027 outlook would also prove the lag call wrong.",
  "catalyst_date": "2026-11-18",
  "portfolio": null,
  "pick": null,
  "themes": [
    "ai-datacenter-infrastructure",
    "gpu-cloud-neoclouds"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "Microsoft is winding down its deal to rent AI computing from Oracle",
      "url": "https://thenextweb.com/news/microsoft-winds-down-oracle-ai-cloud-capacity-deal",
      "date": "2026-11-06"
    },
    {
      "title": "DBS's $290 Oracle Target Still Implies 126% Upside, Even After a Cut",
      "url": "https://www.tikr.com/blog/dbss-290-oracle-target-still-implies-126-upside-even-after-a-cut",
      "date": "2026-11-12"
    },
    {
      "title": "Oracle Stock Just Surged After CoreWeave Earnings. Here's Why One Analyst Says It's Built for the Data-Center Backlash",
      "url": "https://fool.com/investing/2026/11/11/oracle-stock-just-surged-after-coreweave-earnings-here-s-why-one-analyst-says-it-s-built-for-the-data-center-backlash",
      "date": "2026-11-11"
    },
    {
      "title": "Why is Oracle stock surging today?",
      "url": "https://www.investing.com/news/stock-market-news/why-is-oracle-stock-surging-today-93CH-5019496",
      "date": "2026-11-11"
    },
    {
      "title": "CoreWeave Surges 16% as Beat-and-Raise Quarter Eases Financing Fears; Nebius Gains 13%, Oracle Advances 5%",
      "url": "https://247wallst.com/investing/2026/11/11/coreweave-jumps-16-as-beat-and-raise-quarter-eases-financing-fears-nebius-surges-13-oracle-rises-5",
      "date": "2026-11-11"
    },
    {
      "title": "marketscale.com",
      "url": "https://www.marketscale.com/industries/software-and-technology/microsoft-winding-down-oracle-ai-cloud-capacity-deal",
      "date": "2026-11-06"
    },
    {
      "title": "Oracle Stocks Fall 2.77% as NVIDIA Shake-Up Cools the AI Cloud Rebound",
      "url": "https://www.gurufocus.com/news/9194962/oracle-stocks-fall-277-as-nvidia-shakeup-cools-the-ai-cloud-rebound",
      "date": null
    },
    {
      "title": "OpenAI-Linked Oracle Data Center Reportedly Faces Fresh Power Permit Delay In New Mexico",
      "url": "https://stocktwits.com/news-articles/markets/equity/open-ai-linked-oracle-data-center-reportedly-faces-fresh-power-permit-delay-in-new-mexico/cNG1ALIR94m",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "Microsoft is winding down a 2023 deal to rent AI computing capacity from Oracle after declining to renew it; the servers ran older Nvidia chips.",
      "source": "Bloomberg via The Next Web, 2026-11-06",
      "as_of": "2026-11-06"
    },
    {
      "claim": "Oracle scrapped a $7 billion chip lease with Tencent after US officials raised concerns.",
      "source": "Financial Times report of 2026-11-04, per TIKR 2026-11-12",
      "as_of": "2026-11-04"
    },
    {
      "claim": "DBS analyst Andy Yu cut his Oracle price target to $290 from $310 and kept a Buy rating.",
      "source": "TIKR, 2026-11-12",
      "as_of": "2026-11-12"
    },
    {
      "claim": "Oracle said GPU capacity up for renewal in fiscal first-quarter 2027 was renewed or resold at a 20% premium to prior pricing on long-term contracts.",
      "source": "Oracle statement on X, per MarketScale 2026-11-06",
      "as_of": "2026-11-06"
    },
    {
      "claim": "Remaining performance obligations were $664 billion, up from $455 billion a year earlier; OCI revenue was $7.4 billion, up 121%; total revenue was $19.3 billion, up 30%.",
      "source": "Oracle fiscal first-quarter 2027 earnings release and 10-Q",
      "as_of": "2026-08-31"
    },
    {
      "claim": "Quarterly free cash flow was negative $5.4 billion on capital spending of $28.5 billion; long-term borrowings were about $125 billion.",
      "source": "The Motley Fool, 2026-11-11, citing Oracle's quarter to 2026-08-31",
      "as_of": "2026-08-31"
    },
    {
      "claim": "Oracle targets positive free cash flow in the second half of fiscal 2028 and at least $30 billion in fiscal 2029, with new funding through fiscal 2030 capped at $20 billion.",
      "source": "Oracle Investor Day 2026 release and 8-K",
      "as_of": "2026-10-28"
    },
    {
      "claim": "Director Stephen Rusckowski bought 25,000 Oracle shares in the open market at $139.35.",
      "source": "SEC Form 4 filed 2026-10-01",
      "as_of": "2026-09-29"
    }
  ],
  "view_changes": [],
  "frame": null,
  "filed_numbers": {
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    "sector": "Technology",
    "financials": {
      "status": "ok",
      "reason": null,
      "close_date": "2026-11-13",
      "latest_quarter": "2026-08-31",
      "figures": {
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        "gross_margin": {
          "status": "not reported"
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        "operating_margin": {
          "status": "ok",
          "quarters": [
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        "pretax_income": {
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        "net_income": {
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          "four_quarters_musd": 18920
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          "value_musd": 46940
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        "capital_spending": {
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          "value_musd": 75660
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        "free_cash_flow": {
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          "value_musd": -28720
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        "diluted_share_change": {
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          "base_end": "2025-08-31",
          "pct": 3.1
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        "cash": {
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        "debt": {
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          "value_musd": 379025.3
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      "settlement": "2026-10-15",
      "published": "2026-10-26",
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      "days_to_cover": 1.7,
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  "body_markdown": "## Current Thesis\nOracle's shares look more likely to lag the S&P 500 than to lead it over the next three months. Microsoft's exit from a rented-capacity deal, a scrapped Tencent lease and negative free cash flow outweigh a rebound driven by a peer's results. The fiscal second-quarter 2027 report, expected around 2026-12-10, shows whether the $664 billion backlog and the 2026-10-28 Investor Day cash-flow plan still hold.\n\nThe latest rally came from outside the company. CoreWeave reported third-quarter revenue of $3.66 billion, up 168%, after the close on 2026-11-10, per 24/7 Wall St. Oracle closed at $128.38 on 2026-11-11, up nearly 9% that session, per The Motley Fool, then closed at $127.11 on 2026-11-12. Oracle itself reported no new figures in that time.\n\nThe rating is Low because the Oracle-specific news since late October has been negative. Bloomberg reported on 2026-11-06 that Microsoft is winding down a 2023 deal to rent AI computing capacity from Oracle. The Financial Times reported on 2026-11-04 that Oracle scrapped a $7 billion chip lease with Tencent after US officials raised concerns, per TIKR. DBS cut its target to $290 from $310 on 2026-11-12, citing both reports, per TIKR. At $127.11, the shares are 49.2% below their 2026-06-01 high of $250.25, so the market already prices slower backlog conversion; the next report decides whether that discount widens or closes.\n\n## Bull Case\n- **Oracle says renewals priced higher.** Responding to the Microsoft report on 2026-11-06, Oracle said GPU capacity that came up for renewal in fiscal first-quarter 2027 was renewed or resold at a 20% premium to prior pricing on long-term contracts, per MarketScale.\n- **Backlog grew $209 billion in a year.** Remaining performance obligations, meaning contracted revenue not yet booked, were $664 billion on 2026-08-31, up from $455 billion a year earlier, per Oracle's earnings release. Oracle Cloud Infrastructure (OCI) revenue rose 121% to $7.4 billion and total revenue rose 30% to $19.3 billion in that quarter.\n- **The cash-flow turn has a date.** Oracle expects free cash flow to turn positive in the second half of fiscal 2028 and to reach at least $30 billion in fiscal 2029, per its 2026-10-28 Investor Day release. New capital-markets funding through fiscal 2030 is capped at $20 billion, about half equity.\n- **Several brokers stayed positive after the Microsoft report.** Mizuho kept its Outperform rating on 2026-11-09, noting all five of Oracle's mega sites are under construction and four have permits, per The Motley Fool. Bernstein kept its $325 target on 2026-11-10, per TIKR, and Stephens upgraded the shares to Overweight with a $213 target after Investor Day, per Investing.com.\n- **A director bought in the open market.** Director Stephen Rusckowski bought 25,000 shares at $139.35 on 2026-09-29, per an SEC Form 4 filed 2026-10-01.\n\n## Bear Case\n- **A large customer is walking away.** Microsoft has been switching off rented Oracle capacity because the servers ran older Nvidia chips that no longer met its needs, Bloomberg reported on 2026-11-06, per The Next Web. Microsoft is reassessing more than $80 billion of commitments to outside cloud providers, per the same report.\n- **A second contract fell away.** Oracle scrapped a $7 billion chip lease with Tencent after US officials raised concerns, the Financial Times reported on 2026-11-04, per TIKR. DBS lowered its target to $290 from $310 on 2026-11-12 after the two reports.\n- **Cash burn deepened last quarter.** Free cash flow was negative $5.4 billion in the quarter to 2026-08-31, against negative $362 million a year earlier, as capital spending reached $28.5 billion, per The Motley Fool. Long-term borrowings were about $125 billion at the end of August.\n- **Shareholders have already been diluted.** Oracle raised about $19.9 billion by selling new shares in that quarter, per The Motley Fool. S&P Global Ratings has rated Oracle BBB-, one notch above junk, since 2026-07-09.\n- **Data-center politics are turning hostile.** Senator Josh Hawley called for a moratorium on data-center construction on 2026-11-11, per The Motley Fool. The power developer for the New Mexico site waived its right to a state air-permit decision by 2026-11-23, per Stocktwits citing Bloomberg on 2026-11-05.\n\n## Setup & Price Structure\nOracle closed at $127.11 on 2026-11-12. The adjusted close was $144.54 on 2026-10-28, the Investor Day session, and the gain from that day was erased by 2026-11-05, when the shares closed at $115.16. That close sat just above the 52-week closing low of $114.99 from 2026-07-24.\n\nThe shares fell 15.2% over the three months to 2026-11-12. On adjusted daily closes, the 50-day moving average is $136.97 and the 200-day moving average is $153.37 as of 2026-11-12, so the shorter average sits below the longer one and the price sits below both.\n\nThe case turns on two levels. A recovery through the 50-day average and the Investor Day close would show the market looking past the Microsoft and Tencent reports. Trading back toward the July and November lows ahead of the December report would fit the lag call. SEC Form 4 filings show executives' shares withheld for tax at $125.54 on 2026-10-23; Chief Executive Michael Sicilia sold 22,562 shares at $151.59 on 2026-09-22 under a Rule 10b5-1 plan.\n\n## Catalyst Calendar\n\n- **2026-11-18:** Oracle 2026 annual meeting of stockholders, held virtually. It is the first scheduled forum for management to address the Microsoft wind-down, the Tencent lease and capacity demand on the record before the quarterly report.\n- **~2026-12-10 (est.):** Fiscal second-quarter 2027 report; third-party calendars list 2026-12-09 to 2026-12-14, not yet confirmed by Oracle. It shows whether remaining performance obligations hold near $664 billion after the Microsoft and Tencent reports, whether revenue tracks the fiscal 2027 guide of at least $90 billion, and whether cash flow follows the Investor Day timeline.\n\n## What Would Change Our Mind\n\nA daily close above $145, over the 2026-10-28 Investor Day adjusted close of $144.54 and the 50-day moving average, which would show the shares leading again. A fiscal second-quarter 2027 report with remaining performance obligations above $664 billion and a raised fiscal 2027 outlook would also prove the lag call wrong.\n\n## Correlation Notes\nOracle trades with the neocloud group as much as with large software companies. CoreWeave's 2026-11-10 results lifted CoreWeave, Nebius and Oracle together on 2026-11-11, per 24/7 Wall St., and Oracle fell in early trading on 2026-11-12 as a leadership shake-up at Nvidia cooled AI shares, per GuruFocus. News on Microsoft's rented-capacity contracts and on neocloud financing moves all of them at once. The shares also track OpenAI's funding news, because OpenAI is Oracle's largest contract; Steve Eisman said on 2026-11-10 that Oracle could suffer if trouble at OpenAI causes a US recession, per Benzinga.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-12T23:53:42+00:00",
  "last_synthesized": "2026-11-12",
  "date_modified": "2026-11-12",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}