Oracle ( ORCL ) stock led the way to a nearly 7% rise on March 11 after the legacy tech name said artificial intelligence (AI) tailwinds helped it handily beat Street estimates in Q3. The company ended the third quarter with an impressive $553 billion in outstanding performance obligations (RPOs), providing exceptional visibility into future earnings.
And while the stock has failed to break through key resistance, matching its 50-day moving average (MA), Wall Street analysts believe it will double from here over the next 12 months.
Compared to their year-to-date lows in early February, Oracle shares are now up about 20%.
According to Barchart, options traders seem to share analysts’ optimism about ORCL stock as well.
The call ratio on long-dated contracts that expire in mid-December currently sits at 0.78x, indicating a steep skew. Meanwhile, the $214 high in these contracts suggests a potential upside of another 33% from here.
After raising $30 billion last month, Oracle management confirmed in the earnings call that the company will not issue any more bonds in 2026 to help ease concerns related to interest expense and credit risk.
Meanwhile, a dividend yield of 1.24% makes Oracle very attractive to own for income-focused investors.
Wall Street analysts recommend buying Oracle shares on post-earnings strength given that the NYSE-listed company grew its AI-focused cloud infrastructure (OCI) business by an incredible 84% in Q3.
Analysts point to the artificial intelligence capacity’s 32% gross margin—higher than company standards—as evidence that ORCL can scale profitably.
According to analysts, the large quarterly increase in RPO of $29 billion provides a solid outlook, while the decision to maintain capex guidance at $50 billion indicates effective execution.
At about 25x forward earnings, Oracle is a bargain for businesses clearly riding the AI wave, they said in research notes to clients on March 11.
The high street view is reflected in its price targets on Oracle for the next 12 months.
