Oracle: Trust The Math (Rating Downgrade)

2026-03-09 10:30:00 ET

Oracle ( ORCL ) is set to report its 3QFY26 earnings this Tuesday after the bell, and we’re not expecting a positive market reaction post-print. The stock is down roughly 47% since our downgrade in mid-September; back then, the stock surged close to 40% post-Q1 on a 359% jump in RPO and raised cloud infrastructure guidance from 70% to 77%. This was mainly on the back of a $300B OpenAI ( OPENAI ) deal, overshadowing red flags from the business itself, with the company missing top- and bottom-line estimates and holding dot-com-era-like premium multiples. The quarter after, in Q2, Oracle shares sank after trailing estimates on top-line growth, reporting $16.06B versus estimates for $16.21B. RPO grew about 438% Y/Y and 15% Q/Q to $523B, topping expectations. Now, the company is up to report Q3. Even though the stock price has baked in what we’re calling the AI jetters, which are, for the most part, plaguing high-flying tech companies in cahoots with OpenAI, we’re less optimistic about the upside that’ll follow this print. ...

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