Is Oracle Stock a Buy Before Earnings? Here’s What Spark Thinks

Oracle (ORCL) is getting ready to report earnings on June 11, and TipRanks’ AI analyst, Spark, has issued a rating of 78 with an Outperform call. The stock currently trades around $174, and Spark’s price target sits at $192, implying a potential upside of over 10%.

The key driver is Oracle’s push into AI and cloud infrastructure. The company has made significant strides in deploying next-generation NVIDIA GB200 systems and continues to expand its cloud regions at a rapid pace. With AI demand heating up and multi-cloud partnerships gaining traction, Spark sees plenty of fuel left in Oracle’s tank. But that doesn’t mean there aren’t risks on the radar.

What the Bulls Say

Oracle has momentum in all the right places. AI demand is soaring, and Oracle is well-positioned to benefit. Its cloud infrastructure revenue jumped 51% last quarter, and the company expects cloud sales to rise another 28% in Q4 FY25.

Oracle is also one of the first to offer NVIDIA GB200-powered systems. This gives it a competitive edge in the cloud space, particularly as demand for AI-ready computing increases. The company’s multi-cloud business is thriving, with 200% growth in the past three months, driven by partnerships with Amazon (AMZN), Microsoft (MSFT), and Google (GOOG).

Investors looking for long-term growth stories are also paying attention to Oracle’s backlog. Its remaining performance obligations (RPO) rose 63% year-over-year to $130 billion, reflecting strong demand across its cloud services and applications.

_{Cloud revenue keeps climbing, reinforcing Oracle’s AI and multi-cloud growth story.}

What the Bears Say

Not everyone is sold on ORCL, as some key red flags remain.

For starters, Oracle’s capital spending has soared. The company expects to spend around $16 billion in capital expenditures (capex) this fiscal year, which could pressure short-term gross margins, especially within Oracle Cloud Infrastructure (OCI). Higher spending may be necessary to meet the demand for AI, but it could also impact profitability.

Revenue has also been mixed in recent quarters. While the company’s RPO is strong, actual top-line and bottom-line growth hasn’t always impressed. Additionally, the exit from its advertising business resulted in a 2% reduction in cloud revenue growth last quarter.

Valuation is another sticking point. Oracle trades at a P/E of about 41, well above the sector average. With macroeconomic uncertainty, rising competition, and capital expenditure-heavy growth, the market may expect near-flawless execution.

_{Capex is rising steadily as Oracle ramps up AI and cloud investments.}

Is ORCL Stock a Good Buy?

According to the Street’s analysts, Oracle boasts a Moderate Buy rating, with an average ORCL stock price target of $178.42. This implies a 2.53% upside.

See more ORCL analyst ratings

Spark’s Final Take

Spark sees a solid case for Oracle. The AI analyst model views Oracle’s cloud momentum, expanding AI infrastructure, and multi-cloud strategy as key strengths. Strong earnings call sentiment, record bookings, and a 25% dividend hike show confidence from the top.

Still, the model also flags high leverage, stretched valuation, and declining free cash flow growth as risk areas. Technical indicators suggest a bullish trend, but the RSI points to an overheated stock in the near term. In conclusion, Spark gives ORCL an Outperform rating.