Oracle Corp. (ORCL) stock fell Thursday as a broader sell-off in large-cap technology stocks weighed on the company, despite a bullish analyst outlook for its artificial intelligence infrastructure business. The Nasdaq Composite fell 1.22%, while the S&P 500 declined 0.31%.

BNP Paribas analyst Stefan Slowinski reiterated an Outperform rating on Oracle with a $248 price forecast, citing improving visibility into financing needs, future free cash flow and returns from its AI infrastructure expansion.

Slowinski said Oracle's Investor Day reinforced his view that the company likely will not need additional capital beyond the $20 billion it plans to raise in fiscal 2027. Oracle expects to split that financing roughly equally between debt and equity, while increasingly relying on vendor financing and bring-your-own-hardware arrangements for new projects.

Free Cash Flow Turns Positive

Slowinski said Oracle expects capital expenditures to peak in fiscal 2027 and 2028, remaining relatively flat year over year, before free cash flow turns positive in the second half of fiscal 2028. Oracle forecasts $30 billion in free cash flow for fiscal 2029 and aims to keep net debt below 3.5 times adjusted EBITDA.

Slowinski said the company expects 100% free-cash-flow conversion once new infrastructure capacity becomes operational, supporting a more self-funded business model.

Oracle is targeting 10 gigawatts of infrastructure capacity. The company has raised pricing on new five-year contracts to approximately $16 billion per gigawatt from about $10 billion. Management believes the higher pricing could support a 28% return on invested capital.

Oracle Reaffirms $225 Billion Revenue Goal

Oracle reiterated its fiscal 2030 forecasts of more than $225 billion in revenue and earnings of more than $21 per share.

Slowinski said Oracle's diversified global infrastructure network should provide flexibility to manage potential project delays. He expects adjusted operating margins to face pressure during the infrastructure expansion before recovering to more than 40%.

Analyst Sees Significant Earnings Upside

Slowinski said Oracle trades at approximately 10 times projected fiscal 2029 earnings and nine times enterprise value to earnings before interest, taxes and amortization. He sees substantial potential for revenue, earnings and free-cash-flow growth as Oracle expands its AI infrastructure business.

Slowinski believes Oracle is approaching the later stages of its initial AI infrastructure buildout, positioning the company for stronger cash generation as new capacity comes online and capital spending eventually moderates.

ORCL Stock Price Activity: Oracle shares were down 3.18% at $139.95 at the time of publication on Thursday, according to market data.