Oracle Stock: Multiple Analysts Call it Undervalued Amid Rising AI Backlog

Oracle (ORCL) stock has been valued as undervalued by multiple analysts, with one saying its $630 billion AI backlog is underpriced.

A cluster of Wall Street research notes this week has turned into a live debate over how ORCL should be priced, following Oracle's disclosure of a record AI-related contract backlog. D.A. Davidson analyst Gil Luria argues that Wall Street is effectively assigning "zero value" to the roughly $630 billion AI backlog Oracle has built with its cloud customers, calling that stance a "mistake". Oracle's own most recent quarterly disclosure put remaining performance obligations at $638 billion, up 363% year over year, the underlying figure Luria's framing is built on.

The disagreement centers on how much of that backlog should count today rather than years from now. Only a modest share of Oracle's contracted obligations is expected to convert to billed revenue over the next year, which is part of why some investors have discounted the headline number even as it has grown. That tension helps explain why Oracle shares have sold off sharply in 2026 even as the backlog itself expanded, leaving the stock trading at a forward earnings multiple well below the broader technology sector.

Luria is not alone in flagging a possible valuation gap. GuruFocus's GF Value model separately estimated ORCL as roughly 37.6% undervalued using its own quantitative framework. A Yahoo Finance analysis reached a similar conclusion based on trailing and forward earnings, though it cautioned that execution risk on Oracle's AI buildout remains a real offsetting factor, and another report framed the stock's recent bounce as a return to a price level it has defended in past pullbacks.

Not every recent signal favors that view. Oracle's latest pullback outpaced the broader market's decline, a divergence one report tied to renewed scrutiny of the capital spending behind Oracle's AI contracts. Separately, some investors rotating within the AI trade have looked toward turnaround stories such as Intel's foundry buildout as an alternative way to play the theme. For Oracle specifically, the analyst debate leaves a clear marker to watch: how much of the $638 billion backlog converts into recognized revenue in coming quarters, and whether Oracle's balance sheet can absorb the data-center spending required to deliver it.

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