On Oct. 26, 2026, Oracle (ORCL) announced a new set of AI "agentic" applications for its Fusion business software at its Oracle AI World event in Las Vegas. These are programs that carry out multi-step work, such as closing the books or planning supply, with human approval. The latest quote was $126.06, down 0.08%. The launch comes as Oracle spends heavily on capital projects.
Key facts
- Oct. 26, 2026: Oracle announced Fusion Agentic Applications powered by "Fusion Claw," plus two new user experiences, Fusion Companion and Fusion Agentic Home, according to its release.
- Oct. 26, 2026: ORCL's latest quote was $126.06. The 52-week range is $114.5 to $287. Market cap is $381.17B.
- First quarter of fiscal 2027 (ended Aug. 31, 2026): Revenue was $19.34B, up 29.6% from the year-ago quarter. Net income was $4.76B, up 62.6%.
- Same quarter: Free cash flow was -$5.40B, because capital expenditure of $28.50B exceeded operating cash flow of $23.10B.
- Aug. 31, 2026: Total debt was $155.93B against cash and short-term investments of $37.08B.
- Next earnings: Dec. 14, 2026. Analysts expect EPS of 1.88 and revenue of $21.31B.
What happened
Oracle said the new Fusion Agentic Applications are aimed at complex work in finance, HR, supply chain, sales and service. Fusion Claw is described as a new runtime, the engine that runs the agents. Oracle said it supports longer-running tasks, continuous re-planning and "governed autonomy," meaning the agent acts only within limits the customer sets.
The release gave examples of what the agents do:
- Ledger: works through large volumes of accounting entries to investigate exceptions.
- Workforce Orchestration: builds workforce plans.
- Supply Planning Allocation: decides how to divide scarce materials and capacity.
- Procurement Spend: looks for wasteful or off-contract purchasing.
Chris Leone, executive vice president of Applications Development, said in the release: "The next era of enterprise AI is all about delivering software that increasingly does the work, while people define the objectives and set the policies."
Two other pieces were announced:
- Fusion Companion lets users work with Fusion through supported AI tools such as ChatGPT.
- Fusion Agentic Home lets users set goals, hand work to agents and track progress.
The release gave no pricing and no revenue expectations for these products, so their financial effect is unknown.
Why it matters for investors
The latest quarter showed strong growth. In the first quarter of fiscal 2027 (ended Aug. 31, 2026), reported on Sept. 10, Oracle posted EPS of 1.92 as measured against an analyst estimate of 1.74, and revenue of $19.34B against an estimate of $19.13B. GAAP diluted EPS, which follows standard accounting rules, was 1.56.
The growth came from the cloud business. Cloud revenue was $11.61B, versus $7.19B a year earlier. Software revenue was $5.55B, a little lower than $5.72B a year earlier. Hardware revenue was $774.0M and services revenue was $1.41B. The Fusion applications announced Oct. 26 sit inside this cloud and software story, and they are the part of Oracle that works most directly with business users.
Margins: operating margin up, gross margin down. Operating margin is the share of revenue left after running costs. Over five quarters it moved as follows:
| Quarter (ended) | Revenue | Gross margin | Operating margin | |---|---|---|---| | Aug. 31, 2025 | $14.93B | 67.3% | 28.7% | | Nov. 30, 2025 | $16.06B | 66.5% | 29.5% | | Feb. 28, 2026 | $17.19B | 64.6% | 32.8% | | May 31, 2026 | $19.18B | 65.2% | 32.0% | | Aug. 31, 2026 | $19.34B | 60.0% | 34.8% |
Gross margin, which is revenue minus the direct cost of delivering services, fell to 60.0% in the latest quarter from 67.3% a year earlier. Operating margin still rose to 34.8%. This pattern is consistent with a business shifting toward cloud infrastructure, which usually costs more to deliver than traditional software, while spending less on other overhead relative to sales. FMP data does not break out the reasons, so treat this as an interpretation.
Cash flow is the pressure point. Free cash flow, meaning operating cash flow minus capital spending, was negative in all five quarters:
| Quarter | Operating cash flow | Capital expenditure | Free cash flow | |---|---|---|---| | Q1 FY2026 | $8.14B | $8.50B | -$362.0M | | Q2 FY2026 | $2.07B | $12.03B | -$9.97B | | Q3 FY2026 | $7.15B | $18.64B | -$11.48B | | Q4 FY2026 | $14.62B | $16.49B | -$1.87B | | Q1 FY2027 | $23.10B | $28.50B | -$5.40B |
Operating cash flow has grown a lot, but capital spending has grown too. Oracle paid $1.56B in dividends in the latest quarter, and share buybacks were $0.00. Free cash flow was negative while dividends continued and total debt stood at $155.93B.
Valuation versus peers. On trailing 12-month figures, ORCL trades at a P/E of 19.45 and a net margin of 26.4%. For comparison:
- Salesforce (CRM): P/E 22.51, net margin 22.0%.
- IBM: P/E 21.30, net margin 16.0%.
- Microsoft (MSFT): P/E 29.59, net margin 40.3%.
- ServiceNow (NOW): P/E 98.25, net margin 11.3%.
What analysts think. Of 87 ratings, 58 are buy, 25 are hold and 4 are sell, for a consensus of "Buy." The average analyst price target is $235.78, the median is $241.00, the high is $325.00 and the low is $95.00. The average target is above the latest price of $126.06. Targets are opinions and have been wrong before. Recent rating actions on Oct. 22 to 26, 2026 from Wells Fargo, Goldman Sachs and Cantor Fitzgerald, plus Citizens on Oct. 2, all maintained positive ratings. Among recent insider filings, there was one open-market purchase and two sales.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 for ORCL is 53.3, labeled "Fair." Its pillars, scored relative to the sector, are:
- Quality: 70, the strongest.
- Growth: 54.
- Momentum: 40.
- Valuation: 39.
- Safety: 18, the weakest.
What could go wrong
- Debt. Net debt was $119.56B at Aug. 31, 2026, against shareholders' equity of $66.77B. Debt/equity is 2.34. The Altman Z score, a bankruptcy-risk gauge where lower is weaker, is 1.53, and the Piotroski score, a 0-to-9 financial health check, is 5. These match the low Safety pillar.
- Spending ahead of revenue. Capital spending exceeds operating cash flow, so the plan depends on future demand arriving as hoped.
- Falling gross margin. If cloud infrastructure keeps pulling gross margin down, profit growth could lag revenue growth.
- Unproven new products. The agentic applications are new, and the release gave no customer counts, pricing or revenue targets.
- Model signals. The FMP discounted cash flow model returned a value of -$23.53 per share, likely reflecting negative free cash flow. That is a mechanical output, not a verdict, but it shows how much depends on future cash generation.
- Stock already down. The share price is near the low end of its 52-week range of $114.5 to $287.
What to watch next
- Dec. 14, 2026 earnings: analysts expect EPS of 1.88 and revenue of $21.31B.
- Free cash flow: whether operating cash flow grows faster than capital spending.
- Gross margin: whether it stabilizes after falling to 60.0%.
- Fusion adoption: any customer wins, pricing details or revenue commentary for the agentic applications.
- Debt and dividends: how Oracle funds spending, since buybacks were $0.00 in the latest quarter and dividends continued.
- Long-range estimates: analysts see revenue of $48.14B and EPS of 4.46 for the period ending Aug. 31, 2029 (nine analysts).
Frequently asked questions
Q: What did Oracle announce on Oct. 26, 2026?
Oracle announced Fusion Agentic Applications powered by Fusion Claw. These are AI agents inside its finance, HR, supply chain and customer experience software that coordinate multi-step work for human approval. It also announced Fusion Companion, which connects Fusion to AI tools such as ChatGPT, and Fusion Agentic Home, where users set goals and track AI-completed work.
Q: Is Oracle profitable, and how fast is it growing?
Yes. In the first quarter of fiscal 2027 (ended Aug. 31, 2026), Oracle reported revenue of $19.34B, up 29.6% from a year earlier, and net income of $4.76B, up 62.6%. Its free cash flow was negative at -$5.40B because capital spending was higher than operating cash flow.
Q: Is Oracle stock cheap compared with peers?
On a trailing P/E of 19.45, ORCL is lower than Salesforce (22.51), IBM (21.30), Microsoft (29.59) and ServiceNow (98.25). But Oracle carries total debt of $155.93B and negative free cash flow, and its MoonshotScore Safety pillar is only 18. A lower multiple reflects those risks as well as value. This is information, not investment advice.
This is educational content, not investment advice. Past performance does not guarantee future results.