Why Oracle Stock Popped Today
2026-08-26 14:31
•Rich Smith •The Motley Fool
•••• ••• Axe Cap view
Oracle’s Big Bounce: Oversold or Overhyped?
Oracle’s recent 4.5% jump reflects optimism on AI demand despite heavy cash burn concerns.
Oracle’s stock has taken a real beating this year, dropping more than 50% since the summer peak. Citi’s latest call marks a sharp turn, suggesting this downturn is overdone given Oracle’s massive $85 billion backlog and its key role in feeding AI infrastructure needs. They believe the company could triple or even quadruple profits by 2030, which is bullish but comes with a huge caveat: Oracle is forecast to burn through $90 billion in cash over the next two years. For South African investors, this story plays out through risk appetite reflected in USD/ZAR. A stronger AI-driven Oracle may attract foreign capital, potentially supporting the rand, but any stumble in Oracle’s turnaround could push the rand weaker as global risk appetite falters. The jump is intriguing but remember, heavy cash burn and debt raise real questions about sustainability if AI growth slows. this is just our opinion and not financial advice
I’d watch Oracle closely rather than buy outright; for rand exposure, a conservative approach around USD/ZAR makes more sense until there’s clarity on Oracle’s cash flow trajectory.
- ORCL
- USD/ZAR
- Prolonged negative free cash flow
- Slower than expected AI demand
6/10
Oracle stock jumped 4.5% after Citigroup issued a bullish note arguing that Oracle's 54% decline from June to July peak represents an extreme dislocation and buying opportunity. Despite concerns about massive AI infrastructure spending and negative free cash flow projections of $90 billion over the next two years, Citi believes demand for AI services is insatiable and Oracle's $85 billion backlog can cover cash needs. Citi estimates Oracle's GAAP profits could triple or quadruple by 2030, with a potential stock price target of $330 per share.
Our take is based on reporting first published by The Motley Fool.