Oracle Corporation (ORCL): A Bull Case Theory

We came across a bullish thesis on Oracle Corporation on LongYield’s Substack. In this article, we will summarize the bulls’ thesis on ORCL. Oracle Corporation's share was trading at $193.61 as of January 14th. ORCL’s trailing and forward P/E were 38.02 and 29.67 respectively according to Yahoo Finance.

Oracle Corporation offers products and services that address enterprise information technology environments worldwide. Oracle’s latest quarter reinforces a broadly bullish investment narrative centered on its accelerating transition from legacy on-premise software to cloud and AI-driven services, even as heavy reinvestment weighs on near-term optics. Oracle’s core franchises in enterprise databases and ERP/CRM applications are increasingly complemented by its rapidly scaling Oracle Cloud Infrastructure (OCI), which has become the primary growth engine as enterprises ramp AI and data workloads.

In Q2 FY2026, Oracle delivered $16.1 billion in revenue, up 13–14%, with cloud services reaching $8.0 billion and now accounting for roughly half of the business. OCI grew 68% year over year, far outpacing the broader cloud market, while applications revenue rose steadily, offsetting modest declines in legacy licenses. This growth reflects Oracle’s strategy of tightly integrating databases, applications, and infrastructure, reinforced by its multicloud footprint across AWS, Azure, and Google, allowing customers to run leading AI models securely on proprietary enterprise data.

Profitability was boosted by a one-time gain from the sale of Oracle’s Ampere stake, but underlying margins remained resilient despite unprecedented capital spending to build AI-ready capacity. The most compelling signal came from bookings, with remaining performance obligations surging to $523 billion, implying strong multi-year demand and meaningful revenue visibility, including incremental contributions expected in FY2027.

While elevated capex and rising leverage remain key risks, management emphasizes disciplined deployment tied to committed customer demand. At current levels, Oracle represents a leveraged but attractive play on enterprise cloud and AI adoption, with a sizable backlog, differentiated full-stack positioning, and the potential for sustained growth if execution remains on track.

Previously, we covered a bullish thesis on Microsoft Corporation (MSFT) by Long-term Investing in February 2025, which highlighted strong cloud execution, AI-driven growth, and Azure’s expanding role in enterprise workloads. MSFT’s stock price has appreciated by approximately 12.11% since our coverage due to sustained AI monetization and resilient earnings growth. LongYield shares a similar view but emphasizes Oracle’s faster infrastructure growth, backlog visibility, and AI-led cloud reacceleration.

Oracle Corporation is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 122 hedge fund portfolios held ORCL at the end of the third quarter which was 124 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.

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Disclosure: None.