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    Is Oracle (ORCL) Below Fair Value On Microsoft Contract Concerns And AI Spending?

    Simply Wall St·11/09/2026 19:41:57
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    Oracle (ORCL) is under the microscope after a heavy AI infrastructure spending push, a fresh US$20b capital raise, and reports that Microsoft will not renew certain cloud and AI capacity agreements.

    Oracle shares have been under pressure for most of 2026, with the year to date share price return down 40.7% and the 30 day move down 17.9%. The US$20b equity and bond raise, zero free cash flow from heavy data center builds, and Microsoft stepping back from certain cloud and AI capacity deals have all contributed to a weaker mood around AI infrastructure spending.

    Compare Oracle's AI infrastructure reset with a curated group of peers by scanning 53 AI infrastructure stocks that are also pouring heavy capital into data centers and high-performance compute capacity.

    Oracle now trades well below both its recent share price and a wide band of fair value estimates, including a roughly 37% intrinsic value gap and a 51% discount to the US$235.77 analyst target. Where does fair value really sit after this reset?

    Most Popular Narrative: 40% Undervalued

    Against Oracle's last close at $116.10, the leading narrative fair value of $192.59 points to a wide valuation gap and suggests a very different interpretation of the recent selloff. According to andre_santos, a Simply Wall St Community investor who wrote the narrative, that disconnect comes down to how future cash flows and growth are being weighed against current uncertainty.

    To calculate the intrinsic value of the company I will use multiple methods: Discounted Cash Flows (DCF), EPS Growth, Historical P/S, Historical EV/EBITDA, and Historical P/E. Now that we have done all the heavy work, let us take the above and come up with the company weighted average fair value.

    See why 111 investors see Oracle as 40% undervalued.

    Result: Fair Value of $192.59 (UNDERVALUED)

    Still, several pressure points could challenge Oracle, including any prolonged period of zero free cash flow and further pullback from hyperscale partners such as Microsoft.

    Find out about the key risks to this Oracle narrative.

    Next Steps

    Mixed messages around Oracle's valuation and risk reward profile make this a moment to move quickly, test the numbers yourself, and then weigh the 4 key rewards and 3 important warning signs.

    Looking for more investment ideas beyond Oracle?

    You do not need to park all your attention on Oracle. Use the wider market to your advantage and let fresh ideas challenge your current watchlist.