3 Reasons to Hold Oracle Stock Despite 43% Decline in 6 Months

Core Insights - Oracle's shares have decreased by 42.8% over the past six months, significantly underperforming the broader Computer and Technology sector, which returned 12.8%, and the Computer-Software industry, which declined by 25.8% [1][6] - Concerns regarding capital structure and execution risks intensified in January 2026, leading to an additional 15.6% drop in stock price [1][6] Financial Performance - Oracle's Remaining Performance Obligations (RPO) surged by 438% year over year to $523 billion, with an addition of $68 billion in the latest quarter, indicating strong long-term revenue visibility [6][7] - The company maintained its full-year fiscal 2026 revenue expectation of $67 billion despite the stock decline, with RPO expected to convert approximately 33% into recognized revenues over the next 12 months [7][8] Strategic Initiatives - Oracle is expanding its data centers and GPU capacity to meet the demand for AI workloads, with a 50% increase in GPU capacity compared to the previous quarter [9][10] - The company plans to raise between $45 billion and $50 billion through debt and equity offerings to support additional capacity for major customers, while fiscal 2026 capital expenditures increased to approximately $50 billion [10] Market Positioning - Oracle's multicloud strategy has differentiated it in the competitive cloud infrastructure market, with its multicloud database business growing by 817% in fiscal Q2 [11][12] - The company is constructing 72 multicloud data centers embedded within competitor environments, allowing it to capture database workload revenues across various cloud platforms [12] Valuation and Competitive Landscape - Oracle's stock trades at a trailing 12-month price-to-book ratio of 13.84, significantly above the industry average of 6.71, reflecting both growth expectations and market concerns [13][14] - Despite facing competition from Alphabet, Amazon, and Microsoft, Oracle's database expertise and multicloud partnerships provide a unique positioning that may offset competitive disadvantages [14]