Oracle (NYSE: ORCL) shares are gaining momentum as demand for artificial intelligence infrastructure continues to surge.

The company, once a Wall Street favorite, saw its stock hit a 52-week high in September 2025 after a 97% rally earlier that year.

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The surge was fueled by a massive backlog of contracts from hyperscalers and AI firms, driving Oracle's remaining performance obligations (RPO) to grow faster than revenue.

However, concerns over converting that backlog into actual revenue and debt-funded AI build-outs caused a 43% retreat from the peak.

Valuation and Financial Performance

Oracle's current valuation makes it an attractive option for investors. Trading at 35 times earnings, it is cheaper than the Nasdaq Composite's average multiple of 42.7.

Its forward earnings multiple of 24 is even more compelling.

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In the third quarter of fiscal 2026 (ended Feb. 28, 2026), revenue rose 22% year over year to $17.2 billion.

Non-GAAP earnings increased 21% to $1.79 per share. Oracle expects 20% revenue growth in the current quarter and a 16% rise in non-GAAP earnings.

These growth rates are solid given that capital expenditure is set to jump to $50 billion in fiscal 2026 from $21.2 billion the previous year.

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Analysts forecast earnings of $7.45 per share for fiscal 2026, a 23% increase, with a slowdown expected in fiscal 2027 before accelerating again in fiscal 2028.

Market Outlook

The tech-heavy Nasdaq's average earnings multiple underscores Oracle's relative cheapness.

Despite the steep pullback, the company's robust revenue and earnings growth, alongside heavy AI infrastructure investments, position it well for long-term gains.

Investors are watching whether Oracle can sustain its growth trajectory amid rising capital expenditures and market skepticism.

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The stock's recent rise suggests renewed confidence in its ability to capitalize on AI demand.