Oracle ( ORCL ) stock opened comfortably in the green this morning after reporting market-beating Q3 earnings and offering encouraging guidance for the current quarter. After earnings, ORCL is hovering just below its 50-day moving average (MA), with a clear break above $168 expected to further accelerate bullish momentum in the near term.
Compared to this year-to-date low, Oracle stock is now up about 20% — but DA Davidson senior analyst Gil Loria believes it’s still cheap to own at current levels.
In a post-earnings interview with CNBC, Luria said Oracle’s current share price is only growing on its legacy software and cloud operations.
Since the company’s massive $553 billion artificial intelligence (AI) backlog currently receives “almost no credit,” investors today are getting this fast-growing segment for free.
In comparison, peers including Nebius ( NBIS ) and CoreWeave ( CRWV ) are trading at more than 1x their backlog, reinforcing that ORCL stock is essentially trading at 25x forward earnings, he added.
Luria’s base case calls for Austin-headquartered Oracle to reach $180 by the end of the year, indicating a potential upside of more than 10% from here.
Luria also recommends owning Oracle shares because the company’s operating margin was at an impressive 32% in the third quarter. This means that ORCL is no longer just a stable, legacy name – it has actually evolved into a high-growth AI infrastructure stock.
The DA Davidson expert also played down concerns that AI could disrupt the company’s software business, saying “no one will know better how to use AI internally than software companies.”
Note that the NYSE-listed multinational also currently pays a dividend yield of 1.34%, which makes it very attractive as a long-term hold, at least for income-focused investors.
Other Wall Street analysts seem to agree with Luria’s bullish outlook on ORCL shares.
According to Barchart, the consensus rating on Oracle is currently at “Strong Buy,” with an average target of about $266 indicating a potential upside of about 65% from here.
