Oracle (ORCL) Stock Today: AI Cloud Backlog, Debt Warnings and What to Expect from Dec. 10 Earnings

Oracle Corporation (NYSE: ORCL) is back in the spotlight on December 5, 2025, as its stock rebounds in pre‑market trading while Wall Street debates whether the company is a generational AI infrastructure winner or a highly leveraged credit risk.

As of late morning on December 5, Oracle shares trade around $217 per share, modestly higher on the day and up roughly 3% from Wednesday’s close, giving the company a market value of about $610 billion. ^[1] That move follows a 3.18% pre‑market jump earlier in the session, driven by renewed optimism around Oracle’s AI‑driven cloud strategy. ^[2]

The stakes are high: Oracle reports fiscal Q2 2026 earnings on December 10, 2025, with analysts looking for double‑digit revenue growth, another jump in cloud bookings, and clarity on how the company will finance one of the boldest AI infrastructure build‑outs in the world. ^[3]

Where Oracle Stock Stands Going Into Earnings

Price, valuation and volatility

Price today: ~$217
52‑week range: roughly $119–$346 – shares are still far below their 52‑week high near $345.72 after a sharp pullback from September’s AI euphoria. ^[4]
Market cap: about $611 billion ^[5]
Trailing P/E: ~49.6×, above the broader market (~39×) but below the average for high‑growth tech, according to MarketBeat. ^[6]
PEG ratio: ~2.3, suggesting investors are paying a premium for expected earnings growth. ^[7]
Beta: ~1.5–1.7, which means the stock tends to move more than the overall market – both up and down. ^[8]

From a balance‑sheet perspective, Oracle is very leveraged for a mega‑cap tech name:

Debt‑to‑equity: roughly 3.3×
Current ratio: about 0.62, indicating relatively tight short‑term liquidity compared with cash‑rich peers. ^[9]

Despite those risks, investors are still paying nearly 50× trailing earnings for Oracle – a valuation that only makes sense if its AI cloud strategy continues to deliver strong growth.

What Wall Street Expects on December 10

Consensus expectations for Oracle’s fiscal Q2 2026 earnings (to be reported on December 10, 2025) are solidly bullish:

Adjusted EPS: about $1.64, up from $1.47 in the same quarter a year ago (roughly 12% growth). ^[10]
Revenue: expected to grow around 15% year over year to roughly the mid‑teens in billions of dollars, powered by cloud and AI workloads. ^[11]

In the previous quarter (fiscal Q1 2026), Oracle:

Reported revenue of $14.9 billion, up 12% year‑on‑year.
Grew total cloud revenue to $7.2 billion, up 28%.
Boosted cloud infrastructure (OCI) revenue 55% year‑on‑year.
Announced Remaining Performance Obligations (RPO) – contracted but not yet recognized revenue – of $455 billion, up 359% year‑on‑year. ^[12]

That RPO figure is the number that initially sent Oracle stock soaring more than 30% in September – and is now at the center of the bull‑bear debate.

The AI Cloud Story: Massive Backlog and Big Partnerships

RPO and AI demand

Oracle’s headline $455 billion in RPO reflects a wave of multi‑year AI and cloud commitments from marquee customers, including OpenAI, xAI, Meta, Nvidia, and AMD. ^[13] Management has signaled that RPO could exceed $500 billion as more hyperscale AI deals are signed. ^[14]

In her Q1 remarks, CEO Safra Catz laid out an aggressive plan for Oracle Cloud Infrastructure (OCI):

OCI revenue is expected to grow 77% this fiscal year to about $18 billion,
Then rise to roughly $32 billion, $73 billion, $114 billion, and $144 billion over the next four fiscal years. ^[15]

That implies a multi‑year compound growth rate far above typical enterprise software peers.

OpenAI, Stargate and high‑stakes infrastructure

A large chunk of that backlog is tied to Oracle’s deepening partnership with OpenAI, particularly the Stargate AI super‑cluster project:

OpenAI and Oracle have committed to develop an additional 4.5 gigawatts of data‑center capacity, expanding total Stargate capacity under development to more than 5 GW – enough to power millions of high‑end AI chips. ^[16]
The wider Stargate plan calls for 10 GW of compute capacity over four years and could require around $100 billion of capital, according to industry reporting – a figure that has raised eyebrows about funding. ^[17]

Oracle is also broadening its AI hardware and cloud footprint through:

An expanded partnership with AMD to deploy next‑gen EPYC and AI‑focused accelerators on OCI. ^[18]
New OCI AI and multicloud capabilities unveiled at Oracle AI World, including options to run Oracle Database on AWS and other clouds, making Oracle’s stack more accessible to enterprises already standardized on other providers. ^[19]

These initiatives underpin the bullish narrative that Oracle has transformed itself from a slow‑growth database vendor into a serious contender in AI infrastructure.

The Other Side: Debt, Cash Flow and Credit Risk

The growth story comes with serious financial strain.

Morgan Stanley’s debt warning

A widely discussed Economic Times piece on December 5 highlighted a Morgan Stanley report that paints Oracle as the outlier among mega‑cap AI spenders: ^[20]

Oracle’s debt load has surged to more than $104 billion in fiscal 2025, up from $90.5 billion in 2023.
Morgan Stanley estimates total financial obligations (including leases and project financing) could nearly triple to around $290 billion by FY2028.
Oracle’s free cash flow turned negative in 2025, its weakest level in over 20 years and its first negative reading since 1999.
Both S&P and Moody’s have shifted Oracle’s outlook to negative, warning leverage could climb above 4× debt‑to‑EBITDA by 2027–2028.
The cost to insure Oracle’s debt via 5‑year CDS has jumped to about 125 basis points, with Morgan Stanley warning spreads could approach 200 bps, a level last seen during the 2008 financial crisis.

This is why some analysts describe Oracle’s credit profile as “flashing crisis‑level signals,” even while the equity market remains mostly constructive.

Concentration risk: OpenAI and the RPO “shell game”

Other critics worry that Oracle’s giant backlog rests too heavily on a single, money‑losing AI customer:

A recent MarketWatch note said Wall Street expects Oracle’s RPO to climb above $600 billion in the December quarter but flagged concerns that a $300 billion cloud infrastructure deal with OpenAI makes Oracle unusually dependent on one customer. ^[21]
A detailed LinkedIn analysis argued that only about one‑third of the $455 billion RPO is expected to turn into revenue within 12 months, leaving a huge timing gap between upfront capex and long‑dated revenue. ^[22]

In simple terms: Oracle may need to spend massive amounts on data centers now, while much of the contracted revenue won’t be recognized until late in the decade – and only if customers like OpenAI actually fulfill those commitments.

How Wall Street Rates Oracle Stock Right Now

Despite the debt worries, most analysts remain bullish heading into the earnings report.

Consensus price targets

Different data providers broadly agree on two points: “Moderate Buy/Buy” rating and big upside from here:

StockAnalysis.com:
- 31 analysts: consensus “Buy”
- Average 12‑month target:$336.77 – implying about 55% upside from ~$217 today
- Target range $175–$400. ^[23]
MarketBeat:
- 44 analysts: consensus “Moderate Buy”
- Average target:$322.73, about 49% upside from current levels
- Ratings breakdown: 4 Strong Buy, 27 Buy, 11 Hold, 2 Sell. ^[24]
TipRanks:
- 38 analysts over the past three months
- Average target around $351.9, implying roughly 70% upside
- Consensus rating: “Moderate Buy”. ^[25]

On top of the aggregates, several big firms have recently reiterated upbeat views:

Citigroup: Strong Buy, trimming its target from $415 to $375 while still implying over 70% upside. ^[26]
TD Cowen: Buy, with a $400 target, emphasizing OCI growth and improved capex transparency. ^[27]
Deutsche Bank: Buy, $375 target, seeing Oracle as a long‑term winner in AI cloud infrastructure. ^[28]
HSBC: Buy with a target around the $380 level, highlighting potential use of joint ventures and special‑purpose vehicles to share capex burden. ^[29]

Not everyone is pounding the table, though. RBC Capital today reiterated a more cautious “Sector Perform” rating and a $310 price target, which still implies about 45% upside from roughly $214–$217 but stresses growing investor skepticism around debt, customer concentration and margins. ^[30]

Short‑Term Quant and Technical Forecasts

For traders focused on the next few days or months, algorithmic forecasts paint a more mixed, near‑term picture:

A CoinCodex model, updated on December 5, 2025, suggests: ^[31]

5‑day target:$223.20
1‑month target:$214.15 (essentially flat to slightly lower)
3‑month target: around $189.35, implying downside from current levels
1‑year forecast: about $204.83, a modest ~4% decline from the current price
2030 projection: around $510, implying long‑term upside of ~138%, albeit with very wide uncertainty

Key technical signals from the same model:

14‑day RSI: ~35.6 – near, but not yet in, oversold territory.
50‑day SMA: about $258, well above the current price – a sign of a notable pullback.
200‑day SMA: around $211.5, which the stock is hovering just above, making that a key long‑term support zone.
30‑day volatility: about 12%, flagged as “very high.”

CoinCodex characterizes overall sentiment as “neutral” with a mix of bullish and bearish technical indicators – consistent with a stock that has sold off hard but still carries rich expectations. ^[32]

Institutional Flows and Insider Activity

Fresh filings also show how big money is positioning around Oracle ahead of earnings:

Royal Fund Management LLC disclosed a new position of 12,474 shares (about $2.7 million) in Q2. ^[33]
Hedge funds and other institutions collectively own about 42% of the float, while insiders still control roughly 41%, an unusually high level of insider ownership for a company this large. ^[34]

At the same time, insiders have been net sellers recently:

Over the last 90 days, insiders sold about 204,000 shares worth more than $60 million, including notable sales from directors William Parrett and Jeffrey Berg. ^[35]

That combination – high insider ownership plus recent selling – can be interpreted in multiple ways: profit‑taking after a big run, or caution about how much more upside remains in the near term.

Credit Market vs. Equity Market: Two Very Different Stories

One striking theme in today’s coverage is the divergence between equity analysts and credit markets:

Equity analysts overwhelmingly frame Oracle as a Buy/Moderate Buy with ~50–70% upside over 12 months. ^[36]
Credit analysts focus on the risk that Oracle’s aggressive AI capex and huge OpenAI commitments, combined with already high leverage, could strain the balance sheet if demand or pricing disappoints. ^[37]

Morgan Stanley, S&P and Moody’s all highlight negative free cash flow, rising CDS spreads and a potential funding gap by 2027 if capex continues at its current pace without a credible financing strategy. ^[38]

Meanwhile, firms like Citi, TD Cowen and Deutsche Bank argue that fears are overstated and that the December 10 earnings call could show that:

AI demand remains strong,
OCI growth is tracking or beating plan, and
Oracle has more options to structure funding (loans, JVs, off‑balance‑sheet vehicles) than bears acknowledge. ^[39]

What to Watch on Oracle’s December 10 Earnings Call

For investors trying to cut through the noise, here are the key issues to watch next week:

RPO growth and quality
- Does total RPO move toward or beyond $600 billion, as some analysts expect? ^[40]
- How much of that RPO is expected to convert to revenue within 12 months vs. far into the future?
OCI and cloud growth trajectory
- Are OCI growth rates still 50%+, consistent with Oracle’s long‑term plan to scale revenue toward $144 billion over the next several years? ^[41]
- How does profitability in the cloud business look as capex ramps?
Funding plan for AI infrastructure
- Any specifics on loans, partnerships or special‑purpose vehicles to fund Stargate and other large projects, including the reported talks about a $38 billion bank loan for new OpenAI sites. ^[42]
OpenAI and customer concentration
- Updated disclosure on how much of RPO is tied to OpenAI and other large AI customers.
- Any clauses or protections if those customers scale back their commitments.
Debt, free cash flow and ratings
- Management’s response to Morgan Stanley’s debt warning and the negative outlooks from S&P and Moody’s. ^[43]
- A clearer roadmap for returning to positive free cash flow while still investing aggressively in AI.
Guidance and margin outlook
- EPS and revenue guidance for the rest of FY26.
- Commentary on whether high‑margin software and applications can offset lower‑margin infrastructure.

Is Oracle Stock a Buy, Hold or Avoid Right Now?

From today’s December 5 news flow, the bull case for Oracle looks like this:

Enormous, multi‑year AI infrastructure demand, backed by a $455+ billion backlog. ^[44]
Rapid growth in cloud and OCI revenue, with management planning for high‑double‑digit growth for several years. ^[45]
Deep partnerships with OpenAI, AMD and others that could cement Oracle as a top‑tier AI infrastructure platform. ^[46]
A strong analyst consensus with double‑digit expected upside across most major research aggregators. ^[47]

The bear case is equally clear:

Debt already above $100 billion and projected obligations that could approach $290 billion by FY2028. ^[48]
Negative free cash flow in 2025 for the first time since 1999, raising questions about how much more the balance sheet can absorb. ^[49]
Heavy exposure to OpenAI and a handful of massive contracts that may be difficult to fully realize or refinance if AI economics change. ^[50]
A valuation that already embeds a lot of AI optimism, with trailing P/E near 50× and PEG above 2×. ^[51]

For long‑term investors, Oracle is increasingly a high‑conviction, high‑volatility AI infrastructure bet rather than a traditional conservative software holding. Credit markets are already pricing in that risk; the question for equity investors is whether the December 10 earnings report and management’s funding roadmap are strong enough to shift sentiment back toward the bullish side.

This article is for informational purposes only and does not constitute investment, legal or tax advice. All figures and forecasts are as of December 5, 2025 and may change rapidly. Always do your own research or consult a licensed financial adviser before making investment decisions.