Oracle stock, near $130 at writing, is about 60% below its Sept. 10, 2025 record close of $328.33 and down 33% this year, while the S&P 500 returned about 13% through September. The author argues Oracle's cash flow matters more than its cheap-looking earnings: fiscal 2026 capital spending of $55.7 billion exceeded operating cash flow of $32.0 billion, and management guides to $90-95 billion of capex this year. Free cash flow was still negative in the fiscal first quarter, the sixth straight negative quarter, and management gave no timeframe for a return to positive. Oracle is covering the gap with stock sales and about $40 billion of planned debt and equity, which has raised share count and interest costs. The author expects the stock to trail an S&P 500 fund through 2030, despite trading at about 16 times expected earnings.
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