Why Oppenheimer Says Oracle Stock Could Gain 25% From Here

Oracle (ORCL) stock performance has been modest with a 10% decline over the past 52 weeks. While valuations look attractive, markets are concerned about AI investments, balance sheet impact, and cash flows.

However, even after allaying these concerns, Oppenheimer raised ORCL stock to “Outperform” from “Perform” with a $185 price target. The upside thesis is supported by the view that Oracle is likely to be a strong EPS mix. Even after a 25% haircut to management’s guidance, Oracle’s EPS is likely to double by 2030. Additionally, with Oracle announcing a $40 billion to $50 billion equity and debt financing program for 2026, financing and execution risk will be reduced.

Finally, Oracle’s multiples “have more than halved since September,” per Looking for an alpha. This provides a good opportunity to get into the stock which also offers an annual dividend yield of 1.38%.

Headquartered in Austin, Texas, Oracle provides products and services for IT companies worldwide. The company’s core business segments include cloud, software, hardware, and services. In the first six months of fiscal 2026, the cloud and software segment accounted for 86% of total revenue.

For fiscal 2025, Oracle reported revenue of $57 billion. The company has guided for an impressive revenue target of $225 billion by 2030. This would imply a compound annual growth rate (CAGR) of 31% between FY 2025 and FY 2030. Additionally, for the same period, Oracle expects non-GAAP EPS to grow at a CAGR of $2820 to 2020.

While Oracle has lofty growth goals, ORCL stock has corrected by 34% over the past six months. This is a good accrual opportunity as the company is focused on executing its remaining performance obligations (RPO) which have reached $523 billion by Q2 of FY2026.

Oracle is witnessing rapid growth in RPO with commitments from the likes of OpenAI, Meta Platforms ( META ), and Nvidia ( NVDA ), among others. However, the stock price is at a low level.

An important reason is the market’s skepticism about financing and execution. However, Oracle took a positive step by raising $25 billion in debt in February 2026 — a record-setting bond deal that eased funding concerns. Notably, Oracle has also entered into an equity distribution deal to sell up to $20 billion of stock. With a cash buffer of $19.2 billion through Q2 2026, funding growth is unlikely to be a concern.

Once the focus shifts to execution and results are seen in high-growth terms, ORCL stock is likely to trend higher. Regarding RPO, Oracle expects to recognize 12% of revenue over the next 10 months. In addition, 30% will be identified in the next month from 13 to 36 months, followed by 35% in the next month from 37 to 60 months.

The next 12 to 24 months are important, as it will indicate whether Oracle is actually executing the RPO on schedule. Positive numbers on this front could potentially warrant a sharp move in ORCL stock.

Based on 42 analysts with coverage, ORCL stock has a consensus “Strong Buy”. While 31 analysts have given a “Strong Buy” rating, one analyst has a “Moderate Buy” rating, nine analysts have a “Hold” rating and one analyst has a “Strong Sell” rating.

Analysts have an average price target of $284.02, indicating a potential upside of about 91% from here. Furthermore, a high price target of $400 suggests that ORCL stock could rise 168% from current levels.

From a valuation perspective, Oracle stock trades at a forward price-to-earnings (P/E) ratio of 24.18 times. It is interesting considering the growth potential till 2030. According to BNP Paribas, OpenAI plans to spend around $600 billion in computing power by 2030. Microsoft ( MSFT ) and Oracle are likely to be key beneficiaries of this spending.

As of the date of publication, Faisal Humayun Khan had no position (directly or indirectly) in any of the matters mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com