Tech giant Oracle (ORCL) has seen a sharp rise in its stock price this year thanks to the booming demand for AI and a wave of major cloud infrastructure deals. Interestingly, Gil Luria, the managing director at D.A. Davidson and a five-star analyst, told Yahoo Finance that Oracle’s revenue, which typically grows by mid-single digits, could now climb by 15-20% annually over the next few years. That potential explains why the stock has performed well.
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In fact, one of Oracle’s cloud deals alone could add as much as $30 billion in revenue by 2028, as the company positions its Cloud Infrastructure unit as a lower-cost, high-performance rival to Amazon Web Services (AMZN) and Microsoft Azure (MSFT). However, not all analysts are bullish. Indeed, D.A. Davidson holds a Neutral rating with a $220 target, while Mizuho, led by Siti Panigrahi, predicts that there will be a pullback to around $180. Luria warns that while Oracle’s AI and cloud plans are promising, the stock already prices in much of the upside, “unless a significant acceleration in earnings growth can be achieved.”
There are also deeper concerns about the firm’s profitability. While Oracle’s cloud business is growing fast—cloud infrastructure sales jumped by 52% year-over-year—it’s capital-intensive and operates on thinner margins. Meanwhile, its legacy software and maintenance segment, though shrinking, still accounts for 60% of revenue and carries a healthy 50% margin. As a result, Luria points out, “The key is not just revenue growth, it’s whether Oracle can convert that into profitable earnings.”
Is Oracle a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ORCL stock based on 22 Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average ORCL price target of $229.63 per share implies 4.8% downside risk.
