Oracle (ORCL) is attempting to move past its disastrous last earnings report, which saw the stock crash over 35% from its highs after a massive, uncertain contract with OpenAI was revealed. Now, with its Fiscal second-quarter earnings due after the market closes on Wednesday, the company has a clear path to prove its high-growth story is real, even without the AI giant’s immediate revenue.
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The last earnings initially sent the stock soaring 36% as bookings grew by 359%. However, investors quickly panicked once it became clear that most of that number came from one customer, OpenAI, whose ability to pay for the massive order remained uncertain. This fear, coupled with tens of billions in new debt and capital expenditure needed to build AI data centers, has driven the stock to trade near a critical $200 support level.
Oracle’s Cloud Momentum Must Defy OpenAI Uncertainty
The key catalyst for the stock is proving that core demand for Oracle’s AI-driven cloud offerings is robust, a factor not dependent on OpenAI since that contract does not commence until 2027.
Analysts forecast Oracle’s total sales to climb 15% to $16.2 billion, driven entirely by its cloud-based and AI-driven products. The core Cloud Infrastructure segment is expected to deliver growth near 55%, which is a rate that outpaces competitors and confirms that new corporate customers are aggressively adopting the company’s highly efficient AI services.
This revenue growth should translate to earnings of $1.64 a share, which is a 12% jump year-over-year. While profit margins are temporarily lower due to the enormous cost of building out new AI infrastructure, the market is widely understood to be focused on revenue growth and customer adoption first. The earnings report provides a chance to show that this key growth ingredient remains strong, justifying the stock’s current risk.
Analysts See Buying Opportunity at Critical Support
The 35% stock decline since the last earnings has pushed the valuation into what some analysts see as a prime buying opportunity. Mizuho Securities analyst Siti Panigrahi writes, “We view current weakness as a buying opportunity ahead of its second-quarter print in December.”
From a technical standpoint, the stock has shown strength by rising off a low near $198, a key psychological level where buyers stepped in last June. The stock is currently trading just above its 200-day moving average, confirming that as long as the earnings picture does not suddenly darken, the stock is technically positioned for a rebound.
Is Oracle Stock a Buy, Hold, or Sell?
Analyst sentiment toward Oracle (ORCL) is rated as a Moderate Buy, based on the consensus of 38 analysts tracked in the last three months. Of these ratings, 26 analysts call it a Buy, 11 recommend a Hold, and only one recommends a Sell.
The average 12-month ORCL price target sits at $351.87. This target implies a significant upside potential of 64.2% from the last price.
