Oracle (ORCL) shares edged up after the company posted its quarterly earnings, giving investors a clearer view on how its cloud business is performing. The results also put a spotlight on Oracle's growth plans in data infrastructure.
Oracle’s latest results come after a year of momentum, with the stock delivering a 70.65% year-to-date share price return and a striking 64.91% total shareholder return over the past twelve months. Despite a brief dip during the last week, the longer-term trajectory remains strong as investors respond to its focus on cloud and data infrastructure growth.
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With Oracle’s share price sitting below some analyst targets but up sharply over the past year, investors may wonder whether there is still room for upside or if the market has already factored in all the expected growth.
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Most Popular Narrative: 17.7% Undervalued
Despite Oracle closing at $283.33, the most-followed narrative values the company at $344.07 per share, positioning it well above the latest market close. This difference spotlights fresh optimism around Oracle’s pace of growth and ability to capture cloud and AI infrastructure opportunities.
Surging demand for AI workloads, both training and especially inferencing, has positioned Oracle as a key provider for major AI companies (e.g., OpenAI, Meta, xAI, NVIDIA). This has driven a 359% year-over-year increase in remaining performance obligations (RPO) and robust acceleration in cloud infrastructure and database revenue. These factors support expectations for sustained double-digit revenue growth over multiple years.
Want to know the growth blueprint behind this high valuation? The main ingredient is bold future estimates for earnings, margin expansion, and unmatched revenue momentum. Curious what else powers such an aggressive fair value? The full narrative unpacks the numbers and includes the head-turning projections guiding this outlook.
However, Oracle’s outlook still faces hurdles, including heavy reliance on continued AI demand and the risk that cloud capacity investments may outpace real-world growth.
Looking through the lens of the most common valuation benchmark, Oracle’s price-earnings ratio stands at 64.9x, nearly double the US Software industry’s average of 33.3x and slightly higher than the peer group’s 79.5x. Notably, this is also above the company’s fair ratio of 62.7x, implying a premium that could signal valuation risk if growth slows. Does the market expect Oracle’s cloud surge to continue, or are hopes running ahead of fundamentals?
If you see things differently or want to dig into Oracle’s story yourself, it only takes a few minutes to assemble your own perspective, your way. Do it your way
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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
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