Oracle (NYSE:ORCL) Shares Up 3.6% - Time to Buy?

Key Points

• Oracle shares rose 3.6% to about $130.59 amid enthusiasm over its expanded OpenAI partnership and plans to offer a broader range of AI hardware through Oracle Cloud Infrastructure.
• Analysts remain broadly bullish, with a consensus “Moderate Buy” rating and average price target of $248.07; Oracle also reported quarterly revenue growth of 29.6% and earnings above estimates.
• Key risks include heavy AI infrastructure spending, negative free cash flow and rising debt, which could limit upside if Oracle’s large backlog takes longer than expected to convert into revenue.

Oracle Corporation (NYSE:ORCL - Get Free Report)'s stock price was up 3.6% during mid-day trading on Tuesday. The company traded as high as $132.34 and last traded at $130.5910. Approximately 25,620,375 shares were traded during mid-day trading, a decline of 13% from the average session volume of 29,382,494 shares. The stock had previously closed at $126.06.

Trending Headlines about Oracle

Here are the key news stories impacting Oracle this week:

• Positive Sentiment: Oracle expanded its partnership with OpenAI to embed ChatGPT and Codex into Oracle’s business applications, while using OpenAI models and Oracle data and infrastructure to support enterprise workflows. The agreement could strengthen Oracle’s software monetization and customer retention. Oracle Reinvents Enterprise Computing for the AI Era with OpenAI
• Positive Sentiment: Oracle is broadening Oracle Cloud Infrastructure’s AI hardware lineup with Google’s Tensor Processing Units, Nvidia’s Vera CPU, Intel’s Diamond Rapids, Cerebras inference systems and SambaNova chips. Offering multiple architectures may attract more AI workloads and reduce reliance on a single supplier. Oracle integrates ChatGPT, Codex into apps and expands cloud chip lineup
• Positive Sentiment: New and expanded relationships with Intel, Google, Snowflake and Cerebras position OCI as a multi-vendor platform for enterprise and “agentic” AI. Snowflake’s data cloud will be offered as a native OCI service, potentially increasing customer choice and cross-selling opportunities. Oracle Adds Nvidia Vera CPU, Intel Diamond Rapids, Cerebras AI Inference to Cloud Infrastructure
• Positive Sentiment: Analysts remain focused on Oracle’s cloud growth, approximately $664 billion backlog and potential updates to financial targets at Investor Day. Bernstein reiterated an Outperform rating, while Barclays maintained an Overweight rating and a $252 price target. Oracle gains as Wall Street turns more upbeat ahead of Investor Day
• Neutral Sentiment: Oracle also introduced AI security, networking, data-platform and Fusion application features designed to speed implementations and improve enterprise governance. These announcements support the long-term product story, but their financial contribution and adoption rates remain uncertain.
• Negative Sentiment: Evercore and other analysts highlighted the funding demands of Oracle’s AI infrastructure buildout. Negative free cash flow, heavy capital spending, rising debt concerns and bond spreads could limit valuation upside if backlog conversion takes longer than expected. Oracle's AI funding needs investor confidence, says Evercore

Analyst Ratings Changes

A number of research analysts have recently commented on the company. The Goldman Sachs Group lowered their target price on Oracle from $240.00 to $206.00 and set a "buy" rating for the company in a research report on Friday. Guggenheim reaffirmed a "buy" rating and set a $400.00 price target (up from $375.00) on shares of Oracle in a research note on Tuesday, September 8th. Rothschild & Co Redburn lowered their price objective on shares of Oracle from $155.00 to $110.00 and set a "sell" rating for the company in a research report on Monday, July 20th. JPMorgan Chase & Co. reissued a "buy" rating on shares of Oracle in a research note on Thursday, September 10th. Finally, CLSA assumed coverage on shares of Oracle in a report on Monday, July 20th. They issued a "hold" rating and a $145.00 target price on the stock. Thirty-six analysts have rated the stock with a Buy rating, nine have issued a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, Oracle presently has a consensus rating of "Moderate Buy" and an average price target of $248.07.

Oracle Stock Up 3.6%

The company has a fifty day moving average of $142.90 and a two-hundred day moving average of $158.73. The company has a market cap of $394.87 billion, a PE ratio of 20.47, a price-to-earnings-growth ratio of 0.89 and a beta of 1.78. The company has a debt-to-equity ratio of 1.89, a quick ratio of 1.17 and a current ratio of 1.17.

Oracle (NYSE:ORCL - Get Free Report) last posted its quarterly earnings data on Thursday, September 10th. The enterprise software provider reported $1.92 EPS for the quarter, topping the consensus estimate of $1.74 by $0.18. Oracle had a net margin of 26.36% and a return on equity of 48.85%. The company had revenue of $19.34 billion during the quarter, compared to analyst estimates of $19.13 billion. During the same period in the previous year, the firm earned $1.47 earnings per share. Oracle's quarterly revenue was up 29.6% compared to the same quarter last year. Oracle has set its Q2 2027 guidance at 1.850-1.930 EPS and its FY 2027 guidance at 8.100-8.100 EPS. As a group, analysts anticipate that Oracle Corporation will post 6.73 earnings per share for the current fiscal year.

Oracle Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Friday, October 23rd. Stockholders of record on Friday, October 9th were given a dividend of $0.50 per share. This represents a $2.00 annualized dividend and a dividend yield of 1.5%. The ex-dividend date was Friday, October 9th. Oracle's dividend payout ratio (DPR) is 31.35%.

Insider Transactions at Oracle

In related news, Director Stephen Rusckowski purchased 25,000 shares of the business's stock in a transaction dated Tuesday, September 29th. The shares were purchased at an average cost of $139.35 per share, for a total transaction of $3,483,750.00. Following the completion of the acquisition, the director owned 25,390 shares in the company, valued at approximately $3,538,096.50. This trade represents a 6,410.26% increase in their position. The purchase was disclosed in a legal filing with the SEC, which is available at the SEC website. Also, EVP Maria Smith sold 2,631 shares of the firm's stock in a transaction dated Tuesday, September 22nd. The stock was sold at an average price of $151.70, for a total transaction of $399,122.70. Following the completion of the transaction, the executive vice president directly owned 64,357 shares in the company, valued at $9,762,956.90. This represents a 3.93% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 36,075 shares of company stock worth $5,342,123. 38.40% of the stock is currently owned by insiders.

Institutional Trading of Oracle

Several institutional investors and hedge funds have recently modified their holdings of ORCL. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC grew its position in shares of Oracle by 0.8% during the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 14,680,278 shares of the enterprise software provider's stock worth $2,151,395,000 after buying an additional 123,294 shares in the last quarter. Bank of New York Mellon Corp raised its holdings in shares of Oracle by 3.0% in the first quarter. Bank of New York Mellon Corp now owns 13,251,059 shares of the enterprise software provider's stock valued at $1,949,363,000 after acquiring an additional 384,984 shares in the last quarter. Amundi lifted its stake in Oracle by 1.5% in the second quarter. Amundi now owns 9,878,184 shares of the enterprise software provider's stock worth $1,447,648,000 after acquiring an additional 144,087 shares during the period. Dimensional Fund Advisors LP grew its holdings in Oracle by 1.7% during the 1st quarter. Dimensional Fund Advisors LP now owns 8,586,492 shares of the enterprise software provider's stock worth $1,262,827,000 after acquiring an additional 147,048 shares in the last quarter. Finally, First Eagle Investment Management LLC grew its holdings in Oracle by 1.0% during the 2nd quarter. First Eagle Investment Management LLC now owns 8,516,878 shares of the enterprise software provider's stock worth $1,248,148,000 after acquiring an additional 81,700 shares in the last quarter. Institutional investors own 42.44% of the company's stock.

About Oracle

Oracle Corporation NYSE: ORCL is a global technology company that develops enterprise software, cloud infrastructure and database technologies. Its products help organizations store, manage, analyze and secure data, while supporting business operations across industries and geographies.

The company's offerings include Oracle Database, Java, Oracle Cloud Infrastructure and a broad portfolio of cloud-based applications. These applications serve functions such as enterprise resource planning, financial management, human resources, supply-chain management, customer experience and industry-specific operations.

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