Is ORCL a good stock to buy? We came across a bullish thesis on Oracle Corporation on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on ORCL. Oracle Corporation’s share was trading at $159.16 as of March 12th. ORCL’s trailing and forward P/E were 30.66 and 20.41 respectively according to Yahoo Finance.
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Oracle Corporation offers products and services that address enterprise information technology environments worldwide. ORCL is demonstrating clear top-line acceleration as demand for cloud infrastructure and AI-related services strengthens, though the company’s financial profile is increasingly shaped by rising capital intensity. In Q2 FY2026, Oracle reported revenue of $16.1 billion, up 13% year-over-year in constant currency, marking its third consecutive quarter of double-digit growth. Cloud revenue increased 33% to $8.0 billion and now represents roughly half of total revenue.
A major highlight was the surge in remaining performance obligations, which reached $523.3 billion, up 433% year-over-year, reflecting large multi-year AI infrastructure agreements that underscore strong long-term demand for Oracle Cloud Infrastructure (OCI). Non-GAAP EPS rose to $2.26, aided by a $2.7 billion pre-tax gain from the sale of Oracle’s Ampere stake, while free cash flow turned negative at –$10 billion as quarterly capital expenditures climbed to $12 billion to support expanding data center capacity.
Oracle’s cloud applications segment continues to show steady but comparatively slower growth. Cloud applications revenue increased 11%, with Fusion CX growing 12%, demonstrating resilience relative to slower peers but still trailing the rapid expansion of OCI. The company’s competitive advantage stems from tight integration across its enterprise software suite, including ERP, SCM, HCM, and CX, which enables bundled selling and reduces customer churn compared with standalone CRM vendors.
Deferred cloud applications revenue grew 14%, suggesting improving forward demand, although the growth gap with infrastructure remains significant. OCI infrastructure revenue surged 66%, highlighting strong adoption driven by AI workloads. However, the aggressive build-out required to meet demand is compressing near-term margins.
Management expects infrastructure gross margins to reach 30–40% over the life of contracts. Oracle’s Q3 guidance signals further acceleration, projecting 16–18% overall revenue growth and cloud growth of up to 41% in constant currency, reinforcing a bullish outlook driven by sustained AI infrastructure demand and expanding cloud commitments.
