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Oracle (ORCL) has been steadily reinventing itself from a legacy database giant into a formidable cloud infrastructure and enterprise IT solutions provider. Its strategic pivot toward artificial intelligence (AI), coupled with aggressive data center expansion, is beginning to yield tangible results, reflected in robust earnings and growing investor confidence.
ORCL stock surged in June and is carrying that momentum into July, driven by a series of bullish developments. Its cloud infrastructure business is gaining traction at a faster rate than expected, bolstered by rising demand for AI workloads. A landmark cloud deal, projected to generate over $30 billion annually by fiscal 2028, has reinforced the firm's competitive standing. Oracle is also a key player in the $500 billion Stargate AI initiative, which further amplifies its long-term relevance in the AI infrastructure space.
These developments haven’t escaped Wall Street’s attention. TD Cowen recently raised its price target to $275 — a Street-high — highlighting AI-driven cloud momentum. After surging more than 30% in just one month, does ORCL stock have enough firepower left to hit TD Cowen’s target? Or will it burn out before the end of 2025?
About Oracle Stock
Founded in 1977, Oracle has evolved into a $652 billion tech powerhouse. Renowned for its Oracle Database, the company delivers cloud-based solutions across industries. With a strong footprint in cloud infrastructure, hardware, and consulting, Oracle continues to drive enterprise innovation, positioning itself at the core of the world’s AI-driven, data-first digital transformation.
ORCL shares have been on a tear, fueled by booming cloud infrastructure growth and AI tailwinds. After posting strong earnings on June 11, shares spiked more than 13%, signaling serious investor confidence. Over the past 52 weeks, ORCL stock has rallied 62%, with a 41% gain coming in just 2025, handily outperforming both the S&P 500 Index ($SPX) and the iShares Expanded Tech-Software Sector ETF (IGV).
The momentum hit a fresh high on July 8, when shares touched a new record of $241.44. The rally also gained extra firepower on news of Oracle's expanded Stargate partnership with OpenAI.
However, ORCL stock doesn’t come cheap. It is priced at 44 times forward earnings, which is significantly stretched compared to the industry average at the moment.
Oracle’s Q4 Results Surpassed Projections
On June 11, Oracle reported strong fourth-quarter results for fiscal 2025, generating revenues of $15.9 billion, up 11% year-over-year (YOY) and exceeding Wall Street’s estimate. Non-GAAP EPS rose 4% to $1.70, beating expectations and reflecting Oracle’s ability to convert top-line growth into expanding profitability.
The real engine behind this performance was the cloud. Revenue from cloud services and license support surged 14% to $11.7 billion, making up 74% of total sales. Cloud and on-premise license revenues also climbed 9% YOY to over $2 billion.
Oracle is gaining momentum in AI, with leading AI developers choosing Oracle Cloud Infrastructure (OCI) and Supercluster solutions to train and deploy their models. That momentum received a further boost from Oracle's partnership with Advanced Micro Devices (AMD) to integrate Instinct MI355X GPUs into OCI. The move promises double the price-performance efficiency, strengthening Oracle’s position in the AI arms race.
Oracle made waves with another blockbuster development. Bloomberg reports that OpenAI will rent 4.5 gigawatts of data center power from the company as part of the ambitious $500 billion Stargate AI project. Although unnamed in filings, the deal aligns with CEO Safra Catz’s note on major cloud contracts.
Oracle is guiding toward a breakout year, forecasting cloud growth to accelerate from 24% in fiscal 2025 to over 40% in fiscal 2026. Chairman Larry Ellison isn’t holding back, calling Oracle the future “largest and most profitable cloud applications company in the world.” Backed by surging demand, cloud infrastructure growth is expected to exceed 70% next year.
Analysts expect Oracle’s fiscal 2026 EPS to grow 20% to $5.30, followed by an increase of nearly 14% to $6.03 in fiscal 2027.
What Do Analysts Expect for Oracle Stock?
TD Cowen analyst Derrick Wood raised his ORCL stock price target to $275 from $250, reaffirming a “Buy” rating. The upgrade came on the heels of the Bloomberg report that OpenAI expanded its deal with the company. Wood believes this massive agreement unlocks “blue sky" scenarios for revenue growth, pushing Oracle into rarefied air.
Wood emphasized the sheer scale of the agreement, which includes generating $30 billion in fresh annual revenue by fiscal 2028, separate from contract renewals. This could potentially fuel more than 50% top-line growth in fiscal 2028 alone. The analyst projects the contract’s total value could be between $150 billion and $200 billion, driving fiscal 2029 revenue up to $150 billion, well above Oracle’s current forecast of $104 billion. Wood also projects that EPS could hit $15, implying a 25% to 30% compound annual growth rate (CAGR) from fiscal 2025 to fiscal 2029.
Overall, analysts have a positive outlook on ORCL stock, giving a consensus “Moderate Buy” rating. Of the 35 analysts rating the stock, a majority of 22 analysts rate it a “Strong Buy,” one suggests a “Moderate Buy,” and 12 analysts play it safe with a “Hold” rating.
While the tech stock is trading above the consensus price target of $222.44, TD Cowen’s $275 Street-high target suggests shares could rally as much as 17%.
