ORCL Stock Today: January 29 AI Capex Jitters Halve Valuation
Oracle stock fell on January 29 as investors questioned the payoff timeline on AI capex after Microsoft’s latest update. Oracle (ORCL) closed near US$172.80, roughly half its 2025 peak, despite a reported US$523 billion backlog. Sentiment turned cautious as heavy data-centre spending and credit metrics raised near-term risk. We break down price levels, cash flows, OpenAI exposure, and what this means for Canadian investors. All figures are in USD unless noted.
What drove today’s drop
Microsoft’s results and guidance on AI infrastructure reignited questions about near-term returns across cloud names, pressuring Oracle stock as investors reassessed payback periods and utilization risks. Post-update commentary flagged longer cash cycles for GPU buildouts and model adoption, cooling enthusiasm for 2026 earnings leverage. Coverage highlighted sector-wide caution around capex intensity and timelines for monetization source.
Oracle stock traded around US$172.80, with a day range of US$171.86 to US$181.68. It sits well below the 50-day average of US$197.65 and 200-day average of US$219.27. The year high is US$345.72 and the low is US$118.86. Price slipped below the Bollinger lower band at 181.09, while volume of 35.88 million topped its 26.03 million average, signaling elevated conviction on the move.
Reading the balance sheet and cash flows
Capex intensity remains elevated, with capex at 58% of revenue and 159% of operating cash flow. Free cash flow per share is negative at -4.60, and free cash flow yield is about -2.72%. Debt to equity is 4.15, net debt to EBITDA is 3.90, interest coverage is 4.8, and the current ratio is 0.91. These figures explain rising credit risk while AI capex scales.
Oracle reports a US$523 billion cloud backlog, which supports multi-year growth and visibility. The key is conversion speed, capacity on-ramp, and price discipline. If deliveries speed up and utilization improves, operating leverage can offset early-cycle cash burn. Slower deployments would weigh on free cash flow and keep valuation sensitive to execution and margin expansion hopes source.
How Microsoft’s update rippled across peers
Oracle stock trades near 31.8x TTM earnings, versus Microsoft (MSFT) at roughly 27.1x. Oracle’s operating margin is about 30.3%, while Microsoft’s is stronger. Investors questioned whether Oracle deserves a premium while free cash flow is negative and leverage is higher. Analyst tallies show 55 Buy and 13 Hold ratings, but positioning is shifting toward quality balance sheets.
OpenAI exposure is a swing factor. If AI demand accelerates, Oracle could benefit from larger training and inference workloads. If customers pace commitments, near-term utilization may lag capex. We see this exposure as two-sided for Oracle stock, with upside tied to workload scale and downside tied to slower enterprise adoption and budget scrutiny.
What Canadian investors can do now
Technicals are mixed. RSI is 48.22, ADX is 22.54, and MACD is improving. Price sits below the lower Bollinger band, which can mark exhaustion, but ATR at 7.91 signals wide ranges. Consider staggered entries and clear stop levels. Watch the next earnings on March 9, 2026, for backlog conversion and AI capex updates that could reset expectations.
For Canadian portfolios, currency matters. USD exposure adds FX risk when CAD shifts. Consider whether to hedge and avoid concentration in a single AI theme. Blend cash-generative software with AI infrastructure holdings to balance cycles. Keep position sizes aligned with higher volatility until free cash flow trends and capex clarity improve for Oracle stock.
Final Thoughts
Oracle stock is now priced for caution, trading far below its 2025 peak as markets wait for proof that AI capex can translate into durable free cash flow. The backlog is large, but conversion timing and utilization are the swing variables. Balance sheet metrics show tighter flexibility during the build phase, which raises execution risk. For Canadian investors, a phased approach, attention to currency, and focus on cash metrics makes sense. Watch backlog burn rates, margins, and updated capex plans at the next earnings date. If conversion accelerates and free cash flow turns positive, sentiment can improve. If not, expect range-bound trade with spikes on headlines.
FAQs
Why did Oracle stock fall on January 29?
Investors questioned near-term returns on AI capex after Microsoft’s update, which pressured cloud names. Higher spending, slower cash paybacks, and credit metrics drove a valuation reset. Elevated volume confirmed the move, and price slipped below the lower Bollinger band, signaling stress as traders repriced execution risk and backlog conversion timelines.
Is Oracle stock cheap after halving from its 2025 peak?
It screens cheaper versus its own peak, but not absolutely cheap at roughly 31.8x TTM earnings with negative free cash flow. Debt and coverage ratios warrant a higher risk premium until cash generation improves. A re-rating likely needs faster backlog conversion, better utilization, and a clearer path to positive free cash flow.
How do AI capex and OpenAI exposure affect Oracle stock?
High AI capex lifts capacity but weighs on free cash flow early. OpenAI exposure can be a positive if workloads scale quickly, boosting utilization and margins. If enterprise adoption is slower, utilization may lag, which could extend the cash burn phase and keep valuation tied to execution risks and delivery timelines.
What should Canadian investors watch next for Oracle stock?
Monitor the March 9, 2026 earnings for updates on backlog conversion, AI capex pacing, and free cash flow. Track technical levels around the 50 and 200-day averages and watch CAD-USD moves for currency impact. Consider staggered entries and keep position sizing conservative until cash metrics trend higher.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
