Oracle’s AI Build-Out Has Rewired Its Valuation: What the Stock’s Surge Prices In—and What Must Still Be Proven
In the six weeks leading into August, Oracle’s share price climbed nearly 19%, closing at $250.05 on Friday, August 8, up from roughly $210 at the end of June, according to Yahoo Finance. The rally crested intraday at a fresh 52-week high of $260.87 on July 31, placing Oracle among the most visible beneficiaries of the market’s AI infrastructure trade. Behind the price action sits a striking capital expenditure cycle: free cash flow turned negative in the fiscal fourth quarter as Oracle accelerated data center build-outs tied to AI demand, SEC filings show for Q4 FY2025 (quarter ended May 31, 2025). That combination—rising price, rising capex, and the promise of AI-driven cloud growth—has transformed how investors value a software stalwart now trading as a capacity-constrained infrastructure provider in transition. Yet, the filings also reveal leverage, working-capital tightness, and margins that have not visibly expanded despite the hype, complicating the bull case. This article synthesizes recent filings, valuation metrics, and trading dynamics to examine what the market is discounting in Oracle’s AI growth story—and what still needs to show up in the numbers.