Oracle Corporation (NYSE: ORCL) heads into the Independence Day holiday weekend with a stark disconnect between its massive contracted demand and a punishing stock selloff. The database and cloud software giant has seen its shares fall for nine consecutive trading days, erasing nearly a quarter of their value, even as its backlog of future business swells to more than 1.5 times the company's entire market capitalization.
U.S. equity markets were closed Friday, July 3, for the Independence Day observance, with regular trading set to resume Monday. Oracle's last regular-session close was Thursday at $140.27, down 1.56% on the day after touching an intraday low of $138.83. Volume on Thursday reached 44.27 million shares, well above the average of 28.37 million, signaling heavy investor activity.
Nine-Day Rout Erases Billions
The holiday-shortened week saw Oracle shares drop 5.6%, but the broader picture is far more severe. From a closing price of $184.29 on June 18 to Thursday's $140.27, the stock has plunged 23.9% across nine straight down sessions, according to Investing.com data. The current price sits just 4.2% above the 52-week low of $134.57 and a staggering 59% below the 52-week high of $345.72.
The selling pressure comes despite what appears to be a strong demand signal. Oracle reported remaining performance obligations (RPO), a measure of contracted future revenue, of $638 billion at the end of fiscal 2026. That figure is up 363% year-over-year and represents about 1.58 times the company's current market value of $404.04 billion, as listed by Google Finance.
The Capex Conundrum
The central tension for investors is the enormous capital required to fulfill those contracts. Reuters reported that CFO Hilary Maxson said Oracle expects $70 billion in its own capital spending in fiscal 2027, plus an additional $20 billion to $25 billion that it expects to be reimbursed. That total of up to $95 billion in spending far exceeded analyst expectations of $67.66 billion, according to LSEG data.
Maxson also indicated that gross margins will "step down" as Oracle ramps up data-center construction projects. Jacob Bourne, an analyst at eMarketer, noted that while demand is real, "the funding question is getting harder, not easier," as reported by Reuters.
Funding Needs and Balance Sheet Concerns
To bridge the gap between spending and revenue, Oracle plans to raise approximately $40 billion through debt and equity in fiscal 2027, including a previously announced $20 billion at-the-market equity issuance. The company has emphasized that $75 billion of prepaid and customer-supplied hardware in large AI contracts reduces the amount of capital it must raise, but the sheer scale of the buildout remains a key investor concern.
Co-CEO Clay Magouyrk acknowledged the urgency on the company's June earnings call, stating, "My job is to try to spend the money a little bit faster" to bring revenue online sooner. CFO Maxson reiterated the company's commitment to "maintaining a strong balance sheet" and preserving its investment-grade credit rating.
Strong Revenue Growth, but Cash Flow Negative
Despite the stock's decline, Oracle's fiscal 2026 results showed robust growth. Revenue rose 17% to $67.4 billion, cloud revenue jumped 39% to $34.0 billion, and operating cash flow increased 54% to $32.0 billion. However, free cash flow was negative $23.7 billion as the company poured money into cloud infrastructure.
Oracle's next notable event is a July 10 ex-dividend date for its 50-cent quarterly dividend. The stock's next regular trading session is Monday, July 6, with investors likely focused on whether the nine-day losing streak can be broken.
