TLDR
- Oracle stock surged 68% since Jim Cramer’s September prediction that it would perform “exceptionally well”
- Stock jumped 22% in June after raising fiscal 2026 revenue guidance to $67 billion (16.7% growth)
- Recent performance shows -6.3% decline over past month compared to S&P 500’s +1.3% gain
- Analysts maintain Hold rating with consensus earnings estimate of $6.73 for current fiscal year
- Company continues leveraging NVIDIA GPU inventory to serve AI software companies
Oracle Corporation has delivered mixed signals to investors over recent months. The enterprise software giant caught fire after Mad Money host Jim Cramer made bullish comments in September.
Cramer’s prediction proved prescient. Oracle shares climbed 68% following his remarks about the company’s AI transformation.
“Oracle has reinvented itself with an AI kicker to go with its regular enterprise software business,” Cramer stated. He predicted the company would perform “exceptionally well” and help “stop the tech blood flow.”
The stock’s most dramatic single move came in June. Shares rocketed 22% in one session after management raised guidance.
Oracle boosted its fiscal 2026 revenue forecast to $67 billion. This represented 16.7% growth, above the company’s earlier 15% projection.
The guidance bump reflected strong demand for Oracle’s cloud infrastructure services. The company has positioned itself as a key player in the AI boom by accumulating large quantities of NVIDIA GPUs.
AI Infrastructure Play
Oracle rents these high-powered processors to AI software companies. This strategy has transformed the traditional database company into an AI infrastructure provider.
The business model shift appears to be paying dividends. Revenue growth has accelerated as demand for AI computing power surges.
Oracle reported $15.9 billion in revenue for its most recent quarter. This marked 11.3% year-over-year growth, beating analyst expectations of $15.54 billion.
Earnings per share hit $1.70, surpassing the consensus estimate. The company has topped revenue forecasts in two of its last four quarters.
Looking ahead, analysts project continued growth momentum. Current quarter revenue estimates sit at $15.01 billion, representing 12.8% year-over-year growth.
Full-year fiscal 2025 revenue is expected to reach $66.6 billion. Next year’s projection climbs to $79.1 billion, indicating 18.8% growth.
Recent Headwinds
However, recent performance tells a different story. Oracle shares have declined 6.3% over the past month while the S&P 500 gained 1.3%.
The Computer Software industry, Oracle’s sector, has also struggled with a 3.5% decline during this period. This suggests broader headwinds affecting tech stocks.
Analysts remain cautious on Oracle’s near-term prospects. The stock carries a Zacks Rank of 3, indicating a Hold rating.
Earnings estimates have remained largely unchanged recently. Current fiscal year consensus sits at $6.73 per share, reflecting 11.6% growth.
Next year’s estimate of $7.66 per share suggests 13.9% growth. These projections haven’t budged over the past month.
Valuation concerns may be weighing on the stock. Oracle receives an F grade on Zacks’ Value Style Score, indicating shares trade at a premium to peers.
The company’s recent quarterly results showed earnings of $1.70 per share, beating estimates by 3.66%. Revenue of $15.9 billion exceeded forecasts by 2.35%.
