Oracle (NYSE: ORCL) stock has trended downward since the tech giant struck a deal with OpenAI last September. The $300 billion size of the deal led to a 36% one-day gain in the stock price immediately following the deal’s announcement and stoked investor optimism. Still, investors began to doubt whether OpenAI could fulfill its part of the deal.
Moreover, Oracle has borrowed nearly $130 billion as of the end of fiscal 2026 (ended May 31) to build the necessary infrastructure, a considerable burden for a company with a $43 billion book value. Consequently, the stock price has fallem 60% from that high.
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Given these price swings, it is increasingly likely that the market is underestimating the massive growth potential of Oracle. These two reasons explain why investors should look at Oracle as a possible buying opportunity.
1. Oracle’s valuation is more reasonable now
The aforementioned pullback in the stock may have changed Oracle’s investment thesis, particularly regarding its valuation. Last September’s stock surge lifted Oracle’s P/E ratio to 76. At the time, investors seemed willing to pay this premium amid the OpenAI deal.
However, a combination of the falling stock price and a 37% increase in net income during fiscal 2026 reduced its earnings multiple to 22, well below the 32 average P/E ratio for the S&P 500.
Additionally, analysts forecast a continued increase in profits, taking its forward P/E ratio to 16. Hence, despite its considerable debt, that low valuation has made Oracle stock increasingly attractive.
2. RPO growth is not all tied to OpenAI deal
Those rising profits are also a result of the growth in its remaining performance obligations (RPO), or backlog. At the time of the OpenAI announcement, it accounted for about two-thirds of Oracle’s $455 billion RPO.
Admittedly, losing all or part of the OpenAI deal would be a huge setback for Oracle. Nonetheless, in the nine months since the announcement, its backlog has risen to $638 billion.
In other words, Oracle has booked the equivalent of 60% of an OpenAI deal, helping to justify its borrowing and the $56 billion it spent on capital expenditures (capex) in fiscal 2026. That success in attracting additional business implies that Oracle could survive losing the OpenAI deal.