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    Oracle (ORCL) Stock Could Be 37% Undervalued As Cash Flow Targets Firm

    Simply Wall St·11/08/2026 18:24:36
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    Oracle Corporation has seen its stock slide sharply over the past year, and with cash flow now firmly in focus after a heavy AI spending cycle, investors are asking whether the current US$116.10 share price is still aligned with what the business can realistically generate in cash over time.

    • Over the past 12 months the stock has fallen 50.8%, which puts the spotlight on whether that reset now matches the long term cash flows that Oracle can produce.
    • Management is talking up a path to stronger free cash flow helped by AI contracts and a shift toward funding more of its data center build with internally generated cash. This can reshape how you think about Oracle’s ability to support its valuation through its own cash generation rather than fresh capital.
    • Prefer to judge Oracle on earnings? See what Oracle's 19.3x P/E says about the price.

    The issue now is whether those cash flows, given the recent AI commitments and funding plans, are enough to justify where Oracle is trading today.

    If you want a clearer comparison of how other AI infrastructure plays are priced relative to their cash generation, place Oracle alongside companies in the 53 AI infrastructure stocks.

    Is Oracle Still Cheap on Cash Flow?

    The Discounted Cash Flow model here takes Oracle’s future free cash generation and discounts it back to today to compare with the US$116.10 share price. Oracle currently produces last twelve month free cash flow of about US$3.8b, yet the projections used in this model assume that cash moves through a period of deep investment before settling into much larger positive figures by the early 2030s.

    Those assumptions line up with management’s own long range outline that free cash flow could turn positive again in fiscal 2028 and reach more than US$30b by 2029, so a lot of the implied worth rests on Oracle actually converting its AI contract pipeline and new infrastructure into sustained cash. Because that long term cash profile looks strong in the DCF while the share price reset has been sharp, the projections put Oracle's estimated intrinsic value substantially above the current share price. Despite the ambitious AI buildout and the period of weaker cash that comes with it, the model suggests the market is still applying a discount to the cash flows Oracle is expected to produce. Find out what Oracle could be worth using our Discounted Cash Flow (DCF) estimate.

    The Oracle Narrative: What Would Justify Today's Price?

    Simply Wall St Narratives pick up where the Oracle valuation puzzle leaves off. They spell out which paths for Oracle's growth, margins and earnings would need to play out for the stock to be worth materially more or materially less than today’s price on the Community page. Each scenario ties its number to a specific view about how Oracle's expansion, profitability profile and key risks might evolve, giving you something concrete to test as fresh information comes through.

    One of the top community narratives on Oracle: 70% undervalued

    "Oracle’s story is one of a rapid, aggressive transition from enterprise stalwart to AI infrastructure leader, where the OpenAI partnership validated the underlying technology..."

    Discover why this Narrative puts Oracle at 70% undervalued.

    One more check for Oracle that sits beside the cash flow story

    The share price and future cash profile only tell you what Oracle might be worth. The people steering that journey and how their rewards line up with your outcomes is a separate question that deserves its own look. See who runs Oracle and how they are paid.