$ORCL down 36% from its ATH

It seems to me that Oracle’s drop of more than 36% from its peak isn’t entirely surprising and, in my view, may offer an interesting opportunity—but it’s definitely not without risks. After the sharp rise Oracle experienced, investors are somewhat “out of breath.” That growth was driven by an enormous backlog of orders—the company reports remaining performance obligations (RPO) in the hundreds of billions of dollars.

On the other hand, it’s not easy to quickly monetize these future orders—investments in data centers for cloud and AI are not cheap, and Oracle must spend huge resources to meet demand. That means the current decline may largely reflect concerns about whether the company will be able to convert its obligations into real revenues and profits.

My feeling is that for a long-term investor who believes in cloud and AI and is willing to accept the risks associated with aggressive expansion, the current correction could be a good entry point. But for someone who prefers more conservative investments, it isn’t a “safe landing”—it’s important to closely watch how Oracle converts its backlog into cash, what margins it will have in its cloud segments, and how it manages capital expenditures.