Analysts’ optimism about Oracle (ORCL) stock continues to grow, as the enterprise software and cloud company is expected to benefit from artificial intelligence (AI) tailwinds. ORCL stock has pulled back about 8% over the past month, but is still up 82% year-to-date. On Friday, Citi analyst Tyler Radke raised his price target for Oracle stock to $415 from $395 and reiterated a Buy rating. Likewise, Evercore analyst Kirk Materne increased his price target for ORCL stock to $350 from $340 while maintaining a Buy rating.
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Yesterday, analysts at Baird and Phillip Securities initiated coverage of Oracle stock with a Buy rating. Interestingly, Baird analyst Robert Oliver called Oracle the “AI juggernaut for the information age.” These Buy ratings and price target upgrades come despite a recent report by The Information, which raised concerns about Oracle’s AI cloud margins.
Citi Analyst Is Bullish on Oracle Stock
Radke noted that following a “historic Q1,” ORCL shares have pulled back more than 10% from recent highs due to concerns about the quality of backlog, profitability concerns stemming from a slew of press reports, and broader worries about a potential AI bubble and circularity. The 4-star analyst views the pullback in ORCL stock as a buying opportunity, as he sees a broadening set of customers fueling Oracle Cloud Infrastructure (OCI) growth.
Also, Radke expects management to provide greater clarity on capital expenditure, financing needs, and long-term profitability related to the ramping AI projects. The analyst recently boosted his capex estimate significantly. Ahead of Oracle’s analyst day, Radke revisited key assumptions in his model following conversations with the company and industry checks.
Radke contended that while the Street’s consensus is under-modeling gross margin headwinds, he believes that they are not appreciating efficiencies in operating expenses. The analyst expects a compound annual growth rate (CAGR) of 30% in Oracle’s FY26 to FY30 earnings per share (EPS), driven by continued operating expenses efficiency and the expectation of graphics processing units (GPU) gross margins expanding to the range of 35% to 40% in the FY29 to FY30 period.
Evercore Sees Upside to Oracle’s Financial Targets
Meanwhile, Evercore’s Materne refreshed his model heading into Oracle AI World and the financial analyst day. The 5-star analyst expects Oracle to update its long-term revenue and EPS guidance.
Materne added that the FY30 OCI revenue “tease” of $144 billion during the Fiscal Q1 earnings call reinforces his confidence that the company will issue a refreshed revenue forecast for Fiscal 2030. He expects Oracle to deliver some upside to its FY30 revenue forecast as $200 billion “seems reasonable” and confirm the annualized EPS growth forecast of about 20% for FY25 to FY30.
Is ORCL Stock a Buy, Sell, or Hold?
Currently, Wall Street has a Moderate Buy consensus rating on Oracle stock based on 28 Buys, eight Holds, and one Sell recommendation. The average ORCL stock price target of $343.44 indicates 13.6% upside potential from current levels.
