Apple and Oracle investors are experiencing wildly different years, driven by a stark contrast in free cash flow. Apple has generated about $129 billion in trailing 12-month free cash flow, while Oracle has seen a $24 billion outflow. Oracle shares are down 52% since June 2 and 40% year-to-date, trading at a forward price-to-earnings ratio of 14.2 times, its lowest in more than four years. Apple shares have gained 23% this year, pushing its forward P/E to 35 times. The divergence reflects Oracle's heavier capital expenditure needs, funded by new debt, versus Apple's sustained cash generation.
Apple Inc.Apple's strong free cash flow generation is highlighted as a key driver of its stock outperformance.
Alphabet Inc Class C
Oracle CorporationOracle's negative free cash flow and heavy capex funded by debt are cited as reasons for its stock decline.