Should You Buy Oracle Stock While It's Down 53% From Its Peak? The Answer Might Surprise You.

Oracle's cloud infrastructure revenue surged 120% on AI demand, with OpenAI and META among major customers renting computing capacity. Despite the stock trading 53% below its peak, The Motley Fool flags significant risk factors that may warrant caution.

ORCL carries a $117 billion debt load, raising questions about financial flexibility as it scales cloud operations. More critically, the company holds $664 billion in remaining performance obligations—future contracted revenue—but fulfillment is uncertain. OpenAI alone accounts for $300 billion of that backlog, representing nearly half the total.

The concern centers on execution risk: whether customers can meet their commitments and whether ORCL can convert contracted obligations into realized revenue. The AI infrastructure boom has driven explosive top-line growth, but the gap between booked contracts and collected cash introduces volatility for a company already leveraged at current levels.

The valuation has compressed sharply from highs, but debt service costs and backlog concentration create meaningful downside scenarios if AI spending slows or if marquee customers renegotiate terms.