--- title: "‘Don’t Go With the Flow,’ Says Top Investor About Oracle Stock" type: "News" locale: "en" url: "https://longbridge.com/en/news/294087635.md" description: "Top investor James Foord rates Oracle (ORCL) a 'Strong Buy,' arguing the stock is undervalued despite a 52% annual decline. While acknowledging high debt and negative free cash flow due to aggressive AI infrastructure investments, Foord highlights strong operational growth, including 93% cloud revenue increase and attractive valuations. He believes market fear is exaggerated and sentiment will turn positive as Oracle's strategic positioning in AI databases and government contracts yields results." datetime: "2026-07-28T15:23:30.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294087635.md) - [en](https://longbridge.com/en/news/294087635.md) - [zh-HK](https://longbridge.com/zh-HK/news/294087635.md) --- # ‘Don’t Go With the Flow,’ Says Top Investor About Oracle Stock AI stocks are taking another beating in Tuesday’s session as fresh concerns over AI spending and Chinese competition ripple through global markets, with the pullback coming after circuit breakers were triggered in South Korea, where the KOSPI plunged 10.8%. ### Claim 55% Off TipRanks High conviction ORCL bears now have this Tradr ETF But while the selloff in tech stocks is intensifying, few companies have endured the kind of punishment one AI name has already suffered. **Oracle (NYSE:ORCL)** shares have tumbled by 52% over the past year and remain more than 63% below the record high reached last September. That performance, says top investor James Foord, makes Oracle “arguably the most disliked large-cap AI name in the market,” and he thinks there’s a good reason for that. Actually, there are quite a few reasons. For starters, Oracle generated negative free cash flow of $23.7 billion in fiscal 2026 while capital expenditures surged to approximately $55.7 billion, significantly above management’s earlier guidance of around $50 billion. Meanwhile, the balance sheet has become increasingly stretched. Long-term debt has climbed above $122 billion, net debt is approaching $131 billion, and management has indicated it intends to raise an additional $40 billion through debt and equity during fiscal 2027 to continue expanding its infrastructure footprint. “In the world of aggressive AI investments,” Foord said, “Oracle is the most exposed. It has the most debt, the least free cash flow and also the most exposure to a single point of failure due to the $300 billion OpenAI cloud contract.” He also points to growing concerns in the credit markets. Oracle’s five-year credit default swaps recently climbed to a record 198 basis points, while the company carries a BBB- credit rating. So, those are the myriad bearish arguments. However, Foord also thinks the market might be too negative, believing there’s “value at this price.” He notes that Oracle’s underlying business continues to produce impressive operational results. FQ4 revenue increased 21% year-over-year, cloud infrastructure revenue nearly doubled with 93% growth, and operating income jumped 54% to $32 billion. And rather than viewing the company’s negative free cash flow as a structural weakness, Foord sees it as the deliberate consequence of an unprecedented investment cycle. He argues that building excess capacity backed by signed customer contracts is preferable to underinvesting and surrendering market share during the AI race. Beyond AI infrastructure, Foord points to Oracle’s $6.99 billion Department of War contract and its reported lead for Japan’s government cloud deal. He also argues Oracle’s AI Database 26ai sets it apart by embedding AI capabilities directly into its database, allowing the company to leverage its vast enterprise customer base and data advantage while reducing concerns over its reliance on OpenAI. Lastly, Foord notes that the stock currently trades at just over 10 times price-to-cash flow with a PEG ratio near 0.5, valuations he considers attractive relative to many AI peers if the company’s growth catalysts play out. “Oracle is priced today as if the AI buildout is a mistake, and I don’t see it that way,” the 5-star investor summed up. “The credit market’s fear is real but exaggerated, and sentiment will eventually turn in Oracle’s favor once again. This could take some months still, but the time to position for it, however, is now.” To this end, Foord rates ORCL stock a Strong Buy. (To watch Foord’s track record, click here) That is also the conclusion reached by the analyst consensus, a rating based on 28 Buys and 4 Holds. Going by the $259.76 average price target, a year from now, shares will be changing hands for a 118% premium. 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