Despite rising debt levels, Oracle’s large backlog, lower valuation compared to peers, and a sector-wide increase amid lower inflation have boosted investor sentiment.
- Retail sentiment toward Oracle among Stocktwits users is at its highest in about a month.
- A recent Financial Times report said Oracle has emerged as the frontrunner over Amazon Web Services (AWS), Microsoft, and Google to provide a highly secure, air-gapped cloud platform for Japan.
- Wall Street is largely bullish on Oracle, with an average 12-month price target of $251.85, implying 90% upside from current levels.
Shares of Oracle Corp. (ORCL) closed up 3.5% higher on Wednesday, snapping a three-day losing streak as rising debt amid its growing AI orders has pressured the company in recent times.
The stock has tumbled nearly 30% in the past month and has closed in the red for seven out of 10 sessions in July as investors have grown increasingly concerned about the company’s ability to finance and execute its aggressive cloud expansion plans needed to support surging AI-driven demand from customers such as OpenAI.
However, the ride seems to be turning for the hyperscaler, as retail users become ‘extremely bullish’ on the stock, with sentiment rising to its highest level in about a month.
ORCL Stock: Why Is Retail Sentiment Reversing?
Despite its rising debt levels, Oracle has one of the largest remaining performance obligations (RPO) backlogs in the tech industry.
One user noted that the market is treating Oracle like a legacy database company, while “ignoring the $638 billion backlog (RPO) they have on the books.” The user added that the management is “converting 12% of that into revenue over the next 12 months, driving FY2027 revenue guidance to $90 billion. The stock has already cratered 47% to around $128, pricing in the CapEx and debt fears. A drop to $100 would mean a forward P/E of just 12x for a business growing its cloud infrastructure at 93% YoY. The downside is heavily limited here.”
Adding to optimism is softer-than-expected inflation data, easing concerns that the Federal Reserve may need to tighten policy this month. Oracle shares gained alongside other major technology names amid improving market sentiment.
A user said, “Money is being rerouted to hyperscalers so far this morning. Could be some investment firms positioning their plays ahead of ER season starting in 2nd half of July.”
Oracle also has a lower valuation multiple compared to its peers like Amazon.com (AMZN), Microsoft Corp. (MSFT), and Alphabet Inc. (GOOG, GOOGL). ORCL stock trades at a forward price-to-earnings ratio of 16.5x, compared to Amazon’s 30.5x, Microsoft’s 21.4x and Google’s 29.3x multiples.
Another user commented, “Oracle’s biggest competitive advantage may be neutrality. Rather than betting on a single AI model, it’s partnering across AWS, Azure, Google Cloud, and OpenAI while allowing enterprises to keep existing procurement and governance processes.”
Oracle Gains The Lead For Japan’s Sensitive Infrastructure Deal
Meanwhile, a recent Financial Times report said Oracle has emerged as the frontrunner over Amazon Web Services (AWS), Microsoft, and Google to provide a highly secure, air-gapped cloud platform for Japan.
Oracle’s bid has been aided by founder Larry Ellison’s close ties to President Donald Trump, with the company positioning itself early as a provider of a more secure cloud solution for Japan’s sensitive intelligence infrastructure, according to the report.
The report added that Tokyo is yet to make a final decision and could still split the contract. The deal is reportedly considered crucial for the U.S. to strengthen intelligence-sharing with Tokyo amid rising security concerns related to China.
What’s The Street Consensus On Oracle?
Wall Street is largely bullish on Oracle, with an average 12-month price target of $251.85, implying 90% upside from current levels, according to Koyfin data.
Of the 43 analysts covering the stock, 37 have a rating of ‘Buy’ or higher, while five analysts rate it a ‘Hold.’ Only one analyst has a ‘Sell’ rating on ORCL stock.
Meanwhile, the 12-month average price target of $314.27 on Amazon implies an upside of about 23% from its last close. Average analyst targets on Microsoft and Alphabet imply upsides of 41% and 16.5%, respectively.
ORCL stock is down about 32% so far this year.
For updates and corrections, email newsroom[at]stocktwits[dot]com
Read about our editorial guidelines and ethics policy
