Maham Fatima
3 min read
We just published the list of the 10 Best and Cheap Stocks to Buy Heading into 2027 and Oracle (NYSE:ORCL) ranks 6th on this list.
Wall Street’s AI trade took a hard hit on October 30. Reuters reported that a selloff in tech shares pushed MSCI’s global index down 1.5%, after results from Intel and Amazon showed how much cash AI spending is burning. Intel fell 28.6%, and the Philadelphia semiconductor index lost more than 7%, its biggest one-day drop since late June. Alphabet’s shares had already slid 12.6% a day earlier, after it reported that its AI spending pushed its cash flow negative.
The nervousness had been building. Reuters reported on October 15 that South Korea’s KOSPI index, home to some of the world’s largest chipmakers, fell roughly 8% in a single session. Saxo Bank chief investment strategist Charu Chanana said the Asian selloff looked less like a sudden deterioration in technology fundamentals and more like a repricing of the cost of capital.
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Rates are a large part of that story. Bloomberg reported on October 4 that benchmark 10-year Treasury yields sat near 5.3%, and Franklin Templeton Institute head market strategist Chris Galipeau said the conversation would change if they reached 6%. Bloomberg Intelligence analyst Robert Schiffman added that hyperscalers such as Meta, Amazon, Alphabet, Microsoft and Oracle now have cash needs far beyond what they generate, which pushes them toward debt markets.
Oracle made our list of the best and cheap stocks to buy for two reasons. First, its forward P/E is 11 and expected revenue growth rate for 2027 is nearly 32%. Second, it is one of the most popular stocks among hedge funds which is why ORCL is one of the best cheap stocks to buy according to hedge funds.
Oracle’s investor day gave the market something it had been missing: dates. Chief financial officer Hilary Maxson said free cash flow is expected to turn positive in the second half of fiscal 2028 and reach at least $30 billion in fiscal 2029, far above what Wall Street had been expecting, according to data compiled by Bloomberg and FactSet. Capital spending is expected to peak in fiscal 2027 and 2028 before easing, and Oracle said growth is expected to become self-funded once it does.
Management also capped new fundraising through fiscal 2030 at $20 billion, split evenly between stock and debt, which answered the worry that the AI buildout would keep demanding outside money. Oracle reaffirmed its goal of at least $225 billion in fiscal 2030 revenue and pointed to $664 billion of contracted future revenue behind it.
