Oracle vs Adobe stock is now a study in two opposite cash models. Both beat estimates on September 10, 2026. Oracle posted $19.3 billion in revenue, a $664 billion backlog — and negative $5.4 billion in quarterly free cash flow. Adobe posted $6.76 billion in revenue, $2.52 billion in operating cash flow and $2.23 billion of buybacks. On guided earnings, Oracle trades at 18.6x and Adobe at 10.3x.
What happened on September 10, 2026?
Two of the largest US software companies reported within hours of each other on September 10, 2026. Both beat. Both stocks then fell. The reason each fell was the opposite of the other’s.
Oracle’s fiscal Q1 2027 showed revenue of $19.3 billion, up 30%, with cloud infrastructure revenue of $7.4 billion, up 121%. Non-GAAP EPS came in at $1.92 against a $1.73 consensus, according to the earnings slide deck.
Adobe’s fiscal Q3 2026 showed revenue of $6.76 billion, up 13%, with non-GAAP EPS of $6.13 and GAAP EPS of $4.62. The press release also raised full-year guidance and announced that Anil Chakravarthy takes over as CEO on December 1, 2026.
By the September 11, 2026 close, Oracle sat at $150.28, down 1.74% on the day. Adobe closed at $252.23. RBC cut its Oracle price target from $190 to $165 that same day while keeping a sector perform rating, per MarketBeat’s alert.
Which stock is cheaper, Oracle or Adobe?
Adobe is cheaper on every earnings multiple, and it is not close. On the companies’ own guidance, Adobe trades at roughly 10.3x forward non-GAAP earnings and Oracle at 18.6x. On trailing GAAP earnings the gap is 14.1x versus 23.6x. Adobe is the cheaper stock on the math investors can actually verify today.
Forward multiples on company guidance
Oracle guided to at least $8.10 in FY2027 non-GAAP EPS. At the September 11, 2026 close of $150.28, that is 18.6x. Stockanalysis.com lists a slightly lower 17.63x using sell-side estimates.
Adobe guided FY2026 non-GAAP EPS to $24.45–$24.50. At $252.23, the midpoint of $24.475 puts the stock at 10.3x. Stockanalysis.com lists 9.39x on next-year estimates.
Two different multiple sources, same conclusion: Oracle costs roughly 80% more per dollar of guided earnings.
What the trailing numbers say
Oracle’s trailing EPS is $6.38 for a 23.56 P/E; Adobe’s is $17.91 for a 14.08 P/E, both per stockanalysis.com as of September 11, 2026.
Both stocks are well off their highs. Oracle’s 52-week range is $114.50–$331.00, so $150.28 is 54.6% below the top. Adobe’s range is $190.12–$370.86, putting $252.23 32.0% below its high.
Who actually generated cash last quarter?
Adobe did. Oracle’s reported $23 billion of quarterly operating cash flow was swamped by $28.5 billion of capital spending, producing negative $5.4 billion of free cash flow. Adobe converted $6.76 billion of revenue into $2.52 billion of operating cash flow and handed $2.23 billion of it straight back to shareholders.
| Metric (as of Sept 11, 2026 close) | Oracle (ORCL) | Adobe (ADBE) |
|---|---|---|
| Share price | $150.28 | $252.23 |
| Market cap | $454.41B | $100.26B |
| Trailing P/E | 23.56 | 14.08 |
| Forward P/E (company guidance) | 18.6x | 10.3x |
| Latest quarter revenue | $19.3B (+30%) | $6.76B (+13%) |
| Quarterly operating cash flow | $23B | $2.52B |
| Quarterly capex | $28.5B | Not disclosed in release |
| Quarterly free cash flow | −$5.4B | Positive (OCF-led) |
| Total debt | $125B | $6.36B |
| Cash & short-term investments | Not disclosed in release | $5.64B |
| Buyback in the quarter | None reported; $20B equity sold | $2.23B (9.5M shares) |
| Dividend | $2.00 (1.33% yield) | None |
| RPO / backlog | $664B | $22.16B |
Oracle’s capex problem
Oracle guided FY2027 capex to $90–95 billion against revenue guidance of at least $90 billion. That is a company planning to spend more than 100% of its revenue on property and equipment in a single fiscal year.
Management flagged net capex of no more than $70 billion, which implies significant vendor or partner financing inside the gross figure. Total debt already stands at $125 billion.
Oracle also completed a $20 billion at-the-market equity sale during the quarter. Against a $454.41 billion market cap, that is 4.4% of the company sold to fund the build.
Adobe’s buyback math
Adobe retired 9.5 million shares for $2.23 billion in one quarter — an average of roughly $234.74 per share, below the $252.23 September 11 close.
That $2.23 billion equals 2.22% of Adobe’s $100.26 billion market cap in a single quarter. Repeated at that pace, it is an 8.9% annualized buyback yield, before any offset from stock-based compensation.
Net debt is effectively zero: $6.36 billion of total debt against $5.64 billion of cash and short-term investments.
What does a $10,000 position get you in each?
Run the same $10,000 through both and the gap becomes concrete. Adobe buys more guided earnings, more operating cash flow and an active buyback. Oracle buys a dividend, a backlog and a share of the burn.
Adobe, $10,000 at $252.23: 39.6 shares. At guided FY2026 non-GAAP EPS of $24.475, that is $970 of guided annual earnings. Operating cash flow per share ran $6.34 in Q3 ($2.52B ÷ ~397.5M shares), or roughly $25.36 annualized — about $1,005 of operating cash flow attributable to your stake. The Q3 buyback alone shrank the share count enough to lift your claim by 2.22% in three months.
Oracle, $10,000 at $150.28: 66.5 shares. At guided FY2027 non-GAAP EPS of $8.10, that is $539 of guided annual earnings. The dividend pays $133 a year at $2.00 per share. Free cash flow per share was negative $1.79 in Q1 (−$5.4B ÷ ~3.02B shares), so your stake’s share of last quarter’s free cash flow was negative $119. The $20 billion ATM sale diluted the same stake by about 4.4%, or roughly $440 of claim value, in that quarter.
Same $10,000. One position generated roughly $1,005 of annualized operating cash flow and bought back stock. The other consumed $119 of free cash flow and issued stock.
Is Oracle’s $664 billion backlog worth the dilution?
The backlog is real but it is not revenue, and it is not cash. Remaining performance obligations of $664 billion equal 7.4x Oracle’s own FY2027 revenue guidance of $90 billion. Converting it requires the capex that is currently producing negative free cash flow.
Here is what RPO does and does not tell an investor:
- It is contracted, not collected. RPO is the dollar value of signed commitments not yet recognized as revenue.
- It carries no dated schedule in the headline. A $664 billion figure spread over many years is a very different asset from one spread over three.
- It says nothing about margin. Compute contracts signed to win backlog can carry materially lower gross margins than Oracle’s legacy database business.
- It says nothing about counterparty concentration. A backlog built on a handful of large AI customers concentrates credit risk in a way a diversified software base does not.
- It grew $26 billion sequentially — healthy, but a fraction of the $209 billion year-over-year jump, so the sequential pace has cooled.
The skeptical read is simpler still. Oracle’s $23 billion quarterly operating cash flow was boosted by customer prepayments on those contracts. Cash collected in advance flatters operating cash flow today and creates a delivery obligation tomorrow. It is not the same quality of cash as Adobe’s subscription collections against $27.50 billion of recurring revenue already in place.
Is Adobe cheap or a value trap?
A 10.3x forward multiple on a business growing 13% with 44% non-GAAP operating margins is not a normal software valuation. The market is pricing in either a growth cliff or a competitive threat that the current numbers do not yet show.
The bear case is in the growth rates. Ending ARR of $27.50 billion grew 11.2%, with full-year ARR growth guided to 10.2% — decelerating. RPO of $22.16 billion grew 8%, slower than revenue. A CEO change on December 1 adds execution risk.
Against that, AI-first ARR of more than $650 million grew over 150%, and the company reported crossing one billion monthly active users. The stock still fell after the print, which tells you the market cares more about the 8% RPO line than the 150% AI line.
Oracle vs Adobe stock: which fits which investor?
Oracle is a leveraged infrastructure build funded by debt and equity. Adobe is a mature cash machine at a low multiple with a shrinking share count. The table sorts them on measurable attributes only.
| If you are screening for… | Wins on the numbers | Why, measurably |
|---|---|---|
| Lowest earnings multiple | Adobe | 10.3x vs 18.6x on company guidance |
| Positive free cash flow now | Adobe | Oracle FCF was −$5.4B last quarter |
| Shareholder cash returns | Adobe | $2.23B buyback = 2.22% of cap in one quarter |
| Dividend income | Oracle | $2.00 a share, 1.33% yield; Adobe pays none |
| Top-line growth | Oracle | +30% revenue, +121% cloud infrastructure |
| Balance-sheet safety | Adobe | $6.36B debt vs Oracle’s $125B |
| Contracted future demand | Oracle | $664B RPO vs $22.16B |
| Low dilution risk | Adobe | Oracle sold $20B of stock, 4.4% of its cap |
Both names sit inside the same index funds most investors already own, which is worth remembering before treating either as a standalone decision. We covered that overlap in SPY vs VOO vs IVV and the mechanics of index membership in S&P 500 index inclusion. Debt-funded capex also makes Oracle more rate-sensitive than its software peers, which ties back to what 25 basis points costs you.
Frequently asked questions
Did Oracle and Adobe both beat earnings estimates?
Yes. On September 10, 2026, Oracle reported non-GAAP EPS of $1.92 against a $1.73 consensus and revenue of $19.3 billion against $19.14 billion expected. Adobe reported $6.76 billion of revenue and $6.13 non-GAAP EPS and raised full-year guidance.
Why did Oracle stock fall after beating?
Free cash flow was negative $5.4 billion on $28.5 billion of quarterly capex, total debt reached $125 billion, and the company sold $20 billion of stock. RBC cut its target to $165 from $190 on September 11, 2026.
What is RPO and why does Oracle’s matter?
Remaining performance obligations are signed contract value not yet recognized as revenue. Oracle’s $664 billion is 7.4x its FY2027 revenue guidance, but it is a commitment, not cash, and delivering it requires the capex now driving negative free cash flow.
Is Adobe’s 10x multiple a value trap?
The multiple is unusually low for 13% growth and 44% non-GAAP operating margins. The counterweight is deceleration: ARR growth of 11.2% guided down to 10.2%, and RPO growth of only 8%. The market is paying for proof, not promises.
Does Oracle pay a dividend and does Adobe?
Oracle pays $2.00 per share, a 1.33% yield at the September 11, 2026 close of $150.28, with an ex-dividend date of October 9, 2026. Adobe pays no dividend and returns cash through buybacks instead.
How much did Oracle’s equity raise dilute shareholders?
The $20 billion at-the-market sale equals 4.4% of Oracle’s $454.41 billion market cap as of September 11, 2026. Existing holders’ proportional claim on the business fell by roughly that amount during the quarter.
What are analysts’ price targets on Oracle?
Targets are widely dispersed. MarketBeat listed a moderate buy consensus with a $256.05 average on September 11, 2026, spanning RBC’s $165 and Stephens’ $175 at the low end to Cantor Fitzgerald’s $284 and Mizuho’s $320. Stockanalysis.com listed a $239.10 average.
The bottom line
On the only questions that can be measured today, Adobe wins. It is cheaper on guided earnings by roughly 80%, it converts revenue to cash, it has no meaningful net debt, and it is buying back 2.22% of itself per quarter while Oracle sells 4.4% of itself to fund a build.
What Oracle wins on is growth and contracted demand: 30% revenue growth, 121% cloud infrastructure growth and a $664 billion backlog Adobe cannot match at $22.16 billion.
So it depends on exactly one thing: whether you are underwriting reported cash flow or contracted future cash flow. If the standard is cash generated and returned in the last reported quarter, Adobe is the better business at the lower price. If the standard is contract value that has not yet been financed, built or delivered, Oracle is the larger claim — at nearly twice the multiple, with $125 billion of debt and a live equity issuance program attached.
Anyone paying 18.6x for the backlog is paying for execution that has not happened yet. Defensible. Not cheap. For a comparable single-sector exercise, see XLE vs XOP.
This article is journalism, not investment advice. Do your own research before investing.
Sources
- Adobe Q3 FY2026 earnings release, September 10, 2026
- Oracle Q1 FY2027 earnings slides, September 10, 2026
- Oracle Q1 FY27 results: $664B backlog, negative cash flow
- Adobe Q3 FY2026 slides and CEO transition
- Oracle (ORCL) price and valuation data, September 11, 2026
- Adobe (ADBE) price and valuation data, September 11, 2026
- MarketBeat: Oracle analyst downgrade and price targets, September 11, 2026
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