🎁It's earnings day again! From a single-day surge of 36% to a stock price plunge, will the market give Oracle a favorable response this time?

This Tuesday (March 10th), after the US stock market closes,$Oracle (ORCL.US)$Oracle will unveil its fiscal 2026 third-quarter earnings.The market expects its revenue to reach $16.9 billion, a year-over-year increase of nearly 20%; earnings per share are approximately $1.239, showing significant growth compared to the same period last year. However, this time, no one is only interested in the numbers; everyone is asking one question:Did that “profit-for-growth” strategy pass the test?

Compared to the glorious days just six months ago, Oracle is now deeply mired in “growing pains.”In September 2025,Its stock price soared 36% in a single day due to an explosive 359% increase in RPO (Remaining Performance Obligations) to $455 billion,closing at $326.89, briefly making founder Larry Ellison the world’s richest person.

But since then, things have taken a sharp turn,The cost of aggressive expansion is starting to show:To meet the astronomical orders from OpenAI, Meta, and others,The company's capital expenditure has surged, with guidance for the 2026 fiscal year raised to a staggering $50 billion. This has been accompanied by deteriorating free cash flow, which recorded a whopping -$10 billion deficit last quarter,Raising deep concerns in the market about its "profit-for-growth" model, causing the stock price to plummet over 10% in a single day.

The current stock price is hovering around $150, already cut in half from its peak, down more than 50% from its 2025 high.

This earnings report shows that the market is no longer just buying into the "future story," but is instead closely scrutinizing several pointed questions:

>> Can cloud infrastructure growth exceed expectations again?

The cloud infrastructure (OCI) business, seen as the growth engine, reported a 68% year-over-year surge in revenue last quarter to $4.08 billion, with GPU-related revenue skyrocketing by 177%. Against such a high base, can this quarter’s growth rate be maintained or even surpassed? This will directly test whether its GPU production capacity matches the explosive demand for AI computing power.

>> Is the massive RPO a treasure or a trap?

Last quarter, Oracle reported an impressive RPO figure of $523.3 billion, largely driven by long-term large contracts with$Meta Platforms (META.US)$、$NVIDIA (NVDA.US)$A long-term large contract signed with OpenAI. Among these, the single large computing power order with OpenAI alone amounts to $300 billion.
However, the realization capability of this 'paper wealth' is being questioned. Wall Street is concerned that, amid tight power supply and increasingly strict global data center land approval, whether Oracle has the ability to convert these contracts into substantial racks and computing power. In this quarter’s earnings, changes in the proportion of 'revenue confirmable within 12 months' will be a key indicator to assess its delivery efficiency.

>> Can the cash flow 'bleeding' be stopped?

To keep this AI juggernaut sailing, capital expenditures this quarter are expected to remain high. Over the past 12 months, the company's operating cash flow has stayed positive, but free cash flow was negative at -$13.181 billion. Following a one-time gain from the sale of Ampere shares, the market is especially focused on whether free cash flow remains deeply negative, and what new statements management might make regarding their financing plan of $45-50 billion and commitment to maintaining investment-grade credit ratings.

>> Can strategic execution withstand the pressure?

Recent changes in collaboration with OpenAI on expanding data centers in Texas, along with cost-control rumors leading to layoffs, could impact its long-term growth narrative. Management’s guidance for fiscal year 2026 and beyond will determine the direction of market confidence.

Simply put, the market not only looks at how strong its growth is, but also at how efficient its spending is, and whether the leverage ratio could collapse the valuation.Only a substantial improvement in core metrics can rebuild investors' confidence in the profitability of its AI computing power business.

On the eve of earnings, the options market has already started to stir.The implied volatility indicates that the stock price may experience a sharp fluctuation of about ±10.48% after the earnings report.In terms of institutional views, TD Cowen lowered the target price from $350 to $250, and Barclays also reduced it from $310 to $230.However, both maintained a buy rating, believing that pessimism had been overly reflected.

Will Q3 earnings become Oracle's key battle to prove that its big AI gamble is worthwhile?Can the stock price stage a comeback and trigger a valuation recovery?

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Will aggressive capital expenditures bring a more dazzling growth narrative, or will debt pressure and cash flow difficulties burst the AI bubble?

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Ask Futubull AI: Oracle holds $523.3 billion in RPO orders, which indicators can verify that the 'paper wealth' is being realized?

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