TLDRs
- Oracle stock rises after Oppenheimer rates it Outperform with $185 target.
- Investors monitor cloud expansion funding and potential earnings impact.
- Stock sees modest gains after recent swings amid market volatility.
- Oracle’s cash flow from major clients remains a key focus.
Oracle (NASDAQ:ORCL) shares climbed modestly on Wednesday following an upgrade from Oppenheimer, which lifted the software giant’s rating to Outperform and set a new price target of $185.
The move comes after a recent market pullback, with analysts highlighting the improved risk-reward setup for investors. Regular trading closed with a 1.2% gain at $147.89, while after-hours trading added another 0.2% to $148.25.
The stock has experienced some volatility earlier this week, dropping 4.6% on Monday before recovering 3.4% on Tuesday. During Wednesday’s session, shares fluctuated between $147.35 and $153.26 as roughly 24.3 million shares changed hands. Investors are keenly watching how the stock will respond in the run-up to its next earnings report.
Analysts See Long-Term Growth Potential
Oppenheimer analyst Brian Schwartz highlighted that Oracle’s price-to-earnings multiples have been cut by more than half since last September, presenting a compelling entry point for investors. Schwartz described Oracle as a “strong EPS compounder” and projected that earnings could double by fiscal 2030. He also labeled the company a “show me” story, emphasizing that execution will be critical in shifting market sentiment.
Despite the upgrade, some analysts caution that rising costs and execution risks could temper returns. Investors are being asked to focus on contracted demand in Oracle’s cloud infrastructure segment rather than short-term margin pressures.
Funding Cloud Expansion Remains Key
Oracle has ambitious plans to raise between $45 billion and $50 billion this year to support Oracle Cloud Infrastructure buildouts for clients including AMD, Meta, Nvidia, OpenAI, TikTok, and xAI. Approximately half of this funding is expected through equity and equity-linked offerings, including a $20 billion at-the-market program, while the remainder would come from a single investment-grade bond issuance.
The company recently completed a $25 billion notes sale in early February and also issued 100 million depositary shares tied to a 6.5% mandatory convertible preferred stock. These moves aim to provide flexibility for capital expenditures, debt repayment, and other corporate needs.
Investors Eye Earnings and Cash Flow
With Oracle’s earnings report scheduled for March 9, investors are focusing on cloud demand trends and how quickly large clients convert commitments into cash flow. Even minor delays or weaker-than-expected spending could put pressure on the stock, especially given the company’s current financing plans and market expectations.
The combination of analyst optimism, aggressive cloud expansion, and ongoing investor scrutiny makes Oracle a company to watch closely in the coming weeks. While the stock has regained some ground after recent swings, its trajectory will largely depend on execution and real-world adoption of its cloud services.
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