Oracle Valuation Gap Widens Amid Cloud Growth and Massive Backlog

Oracle (NYSE: ORCL) is currently navigating a period of high volatility, with its share price retreating more than 57% from its September 2025 peak to approximately $138 as of April 11. This decline follows a broader technology sector sell-off and investor apprehension regarding the company's aggressive capital expenditure strategy. Despite the price correction, the company's fundamental growth remains robust. In the third quarter of fiscal 2026, Oracle reported a massive expansion in its Remaining Performance Obligations (RPOs), which surged 325% year-over-year to reach $553 billion. This backlog provides significant revenue visibility for the coming years. Financial performance continues to trend upward, with overall revenue increasing 22% year-over-year. The cloud infrastructure segment showed particularly strong momentum, posting an 84% revenue increase, bringing the segment's quarterly total to nearly $5 billion. Management has reaffirmed its fiscal 2026 guidance and raised expectations for 2027, projecting total revenue could hit $90 billion. With a forward P/E ratio of approximately 18 and an enterprise value-to-EBITDA of 17.5, the stock now presents a more attractive valuation compared to its levels in the fall of 2025.