Key Stats for Oracle Stock
- YTD Price Change for Oracle stock: 18%
- $ORCL Share Price as of Dec. 23: $195
- 52-Week High: $346
- $ORCL Stock Price Target: $291
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What Happened?
Oracle (ORCL) stock is under pressure in recent months, falling 40% from all-time highs. Despite posting strong second-quarter results, with cloud revenue jumping 33% and total revenue climbing 13%, Oracle stock has been caught up in broader market uncertainty about AI infrastructure investments.
The company announced a massive $68 billion increase in remaining performance obligations (RPO) during the quarter, primarily driven by deals with Meta, NVIDIA, and OpenAI.
While this backlog signals strong future demand, some investors are concerned about the concentration risk posed by OpenAI, which accounts for a significant portion of Oracle’s AI infrastructure contracts.
Oracle stock has fallen more than 20% from its 52-week high as the market weighs the company’s heavy capital expenditure plans.
Management now expects fiscal 2026 capex to be about $15 billion higher than previously forecasted to support the rapid buildout of AI data centers.
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What the Market Is Telling Us About Oracle Stock
The decline in Oracle stock suggests investors are grappling with two competing narratives.
- On one hand, Oracle is clearly winning major AI infrastructure deals and growing faster than its competitors in cloud infrastructure.
- On the other hand, the capital-intensive nature of this business and concentration around a few large customers are raising questions about profitability and risk.
However, Wells Fargo analyst Michael Turrin argues the recent selloff in Oracle stock is “overdone.” In a note to clients, Turrin maintained his Overweight rating and $280 price target, estimating that OpenAI could contribute 25-30% of Oracle’s earnings by fiscal 2028-2030.
He sees “meaningful market share gains” ahead as AI infrastructure remains in the “very early innings.”
Oracle’s management emphasized on the earnings call that they have multiple financing options to fund growth while maintaining their investment-grade debt rating.
The company also highlighted that much of the new RPO can be quickly monetized, with $4 billion in additional revenue expected in fiscal 2027.
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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 stocks mentioned. Thank you for reading, and happy investing!
