u/Odd_Veterinarian4381

Oracle's Q4 FY2026 revenue grew 21% to $19.2B, cloud infrastructure surged 93% to $5.8B, operating cash flow hit a record $32B, and backlog is $638B. The stock's 25% drop from $248 to $187 is driven by fear of capex ($55.6B, up 162%) and negative FCF, but the capex funds AI infrastructure with massive pre-committed demand, suggesting the selloff is overdone. At ~21-22x annualized Q4 EPS, Oracle is undervalued relative to its growth rate (21% revenue, 93% cloud) and backlog visibility, making it a potential value buy amid market panic. Capex may not generate expected returns if AI demand slows; additional $40B debt/equity raise dilutes shareholders; competition from AWS, Azure, Google Cloud could pressure margins.

MSFT closed +3% while global indices fell ~2%, and it’s still 24% below its $555 ATH with a 94/100 quality score. This divergence suggests institutions may be rotating into high-quality tech, and a break above $433 resistance could trigger further upside toward $460-470. MSFT offers a compelling risk/reward as a safe-haven growth play with strong fundamentals and a large discount from peak. Valuation at 30x earnings isn’t cheap; broader market selloff could resume, or Azure/AI Copilot growth may disappoint; $433 resistance may hold. No other actionable trade ideas in this post.