Key Takeaways
- Stephens upgraded Oracle to Overweight on Monday and raised its price target to $213, 63% above Friday’s close.
- Stephens’ case rests on Oracle’s Investor Day, where the company put a date on positive free cash flow and capped new fundraising at $20 billion through fiscal 2030.
- To reach the target, investors would have to pay 25x Oracle’s expected earnings over the next twelve months, above its 21x five-year average, though analysts expect earnings to jump in fiscal 2028.
- Stephens’ target looks about right if fiscal 2028’s earnings arrive, but OpenAI’s share of Oracle’s backlog is the risk the funding plan leaves open.
Oracle (ORCL) closed Friday at $130.68, 50% below its high of a year ago. On Monday, Stephens upgraded it to Overweight from Equal Weight and raised its price target to $213 from $185, 63% above Friday’s close.
The build ate the cash
In fiscal 2026, the year to May 31, Oracle spent $55.7 billion on capex for its AI build, and free cash flow was negative $23.7 billion.
Its Sept. 10 release showed negative free cash flow of $5 billion on $28.5 billion of first-quarter capex. Asked on the call when free cash flow would turn positive, CFO Hilary Maxson said: “We haven’t given a particular time frame on that yet, and we don’t expect to give that today.”
Stephens says the money is lined up
Oracle gave a time frame at its Oct. 28 Investor Day: positive free cash flow in the second half of fiscal 2028. It also capped new fundraising at $20 billion through fiscal 2030, split evenly between stock and debt.
Stephens says vendor financing, customers’ own hardware and prepayments now cover more of the build, so Oracle needs about $20 billion of new funding, about half of what was expected before.
TIKR tracks 43 analysts on Oracle. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Oracle, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Oracle’s Analyst Ratings
Does $213 hold up?
The average target of the 43 analysts covering Oracle fell from $348 on Nov. 4, 2025, to $236 on Oct. 30, with individual targets ranging from $110 to $400. Stephens’ $213 sits 10% below that average:
Analysts expect normalized EPS of $8.14 in fiscal 2027 and $11.04 in fiscal 2028, up from $8.05 and $10.89 three months ago:
Yet the stock trades at 15x forward earnings, well below its five-year average of 21x:
Investors paid about that much from 2014 to 2021, when Oracle’s revenue grew about 1% a year. Oracle now guides to at least 34% revenue growth in fiscal 2027.
To reach $213, investors would have to pay 25x Oracle’s expected earnings over the next twelve months, above that average. But the multiple $213 needs falls as fiscal 2028’s $11.04 rolls into that window.
OpenAI is still the open question
S&P has said OpenAI makes up about half of Oracle’s $664 billion backlog.
Stephens has it about right. Oracle has its money lined up, estimates are climbing, and $213 needs no more than Oracle’s usual multiple once fiscal 2028 comes into view. But much of the revenue behind those estimates depends on OpenAI paying its bills.
Oracle reports its second quarter in December. Backlog growth from customers other than OpenAI would ease that worry.
So what is Oracle stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Oracle could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
