Oracle (ORCL) saw its stock price hit record highs this year after delighting analysts with third-quarter results that beat their expectations.
The US software giant is also ramping up competition with its rivals by adding generative artificial intelligence features across its corporate software line-up.
Such positives were enough to ignite investor enthusiasm and push the share price up to $129.20 by late March – a 24% increase over its $104.06 level at the start of 2024.
But what’s next for the ORCL stock price? Could it climb even higher over the coming months, or are the recent hikes likely to be temporary?
In our Oracle stock forecast 2024, 2025, and beyond, we look at the company’s recent results, its plans for the future, and what analysts are expecting to happen next.
Key Takeaways
- The ORCL stock price has gained 24% this year on the back of better-than-expected third-quarter results.
- Oracle announced an expanded collaboration with Nvidia.
- Analysts expect ORCL stock to benefit from involvement in AI.
- Oracle is now the world’s fourth-largest software company.
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Summary of the Latest Oracle Stock Predictions
| Oracle Stock Forecast (as of April 3, 2024) |
1-Year Forecast | 2025 (December) | 5-Year Forecast to April 2029 |
| MarketBeat | $130.76 | – | – |
| WalletInvestor | $140.042 | $149.928 | $197.336 |
| TipRanks | $137.82 | – | – |
| GovCapital | $193.44 | $208.901 | $601.972 |
Oracle Stock Analysis: Key Drivers to Consider
Any Oracle share price forecast must consider key potential influences, and the latest Oracle news that have already affected its valuation and are likely to do so over the coming months.
Solid Third Quarter Results
The ORCL stock price rose 24% this year on the back of better-than-expected third-quarter results for the three months ended February 29, 2024.
Total quarterly revenues were up 7% year-over-year to $13.3bn, with cloud services and license support revenues up 11% to $10bn on a constant currency basis.
In a statement, Safra Catz, Oracle’s chief executive, said:
“We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply—despite the fact we are opening new and expanding existing cloud datacenters very, very rapidly.”
Oracle’s board of directors also declared a quarterly cash dividend of $0.40 per share of outstanding common stock.
Expanded Collaboration with Nvidia
In mid-March 2024, Oracle and Nvidia announced an “expanded collaboration” to deliver sovereign artificial intelligence solutions to their customers around the world. The two tech giants are combining efforts to enable governments and enterprises to deploy artificial intelligence factories.
Safra Catz, Oracle’s chief executive, said: “As AI reshapes business, industry, and policy around the world, countries and organizations need to strengthen their digital sovereignty in order to protect their most valuable data.”
Jensen Huang, Nvidia’s founder and chief executive, added:
“In an era where innovation will be driven by generative AI, data sovereignty is a cultural and economic imperative.”
The results helped push the ORCL stock price to a record high of $129.20 by late March. This represented a 24% increase over its $104.06 level at the start of 2024.
If we look at the longer 1-year chart, the ORCL stock gained 32.28% during the last 12 months (as of April 3, 2024).
The 5-year Oracle stock performance suggests that it gained an impressive 130.56%.
Oracle Stock Forecast: Analyst Views
So, what are the latest Oracle stock predictions of analysts?
Oracle’s third-quarter results were in line with broad investor expectations despite being below Morningstar’s expectations, according to Julie Bhusal Sharma, one of its equity analysts.
She wrote after the results announcement in March:
“Despite the recent stock performance, we maintain our fair value estimate of $84 per share and see shares as overvalued.”
However, she pointed out that the company was progressing well on initiatives in both Cerner and Oracle Cloud Infrastructure.
“There is reason to be excited for the next several years, as cloud growth and bookings are impressive,” she added. “We are fully behind management’s strategy to rapidly build out as much cloud capacity as reasonably possible, as we think this will be the primary growth driver over the long term.”
Bhusal Sharma also pointed out that the impressive stock price increases must be seen in context.
“Oracle is growing faster than other leading providers but is much smaller, so the share gains are more mathematical than competitive, in our view,” she added.
Looking ahead, she remains broadly optimistic.
“While guidance for the fourth quarter was, once again, slightly shy of our expectations, management strongly reiterated its revenue target of $65bn for fiscal 2026,” she said. “We are below this guidepost, as we would prefer to see continued signs of improvement before jumping in with both feet.”
‘Fear of Missing Out’ Drives ORCL Stock Performance
Susannah Streeter, head of money and markets at Hargreaves Lansdown, believes Oracle has been “swept along in the enthusiasm” for US stocks.
She told Techopedia:
“Investors are still largely highly optimistic about the prospects for big tech, as demand for artificially intelligent powered services continues to grow sharply. Although shares are off recent highs, Oracle is still being seen as another winner in the AI revolution.”
Streeter pointed out that firms across a wide range of sectors were being spurred on by the FOMO effect, fearful of missing out on opportunities.
“They are investing heavily on increasing data capacity and the growth in Oracle’s cloud revenue segment has galvanized interest,” she explained. “There are signs customers are locking into contracts offering repeat and reliable future revenue streams. Its razor-sharp focus on the developing AI powered tools for healthcare innovations has also caused excitement.”
Although it’s clear that AI-powered applications offer huge potential, Streeter believes it’s important to stress that the demand trajectory is far from clear.
“Some firms may have brought forward funding to upgrade their data capacities to ensure they are ready for the benefits the new technology will bring, without knowing exactly how they will play out, so there are likely to be spells of volatility ahead,” she added.
According to Andrew Merricks, portfolio manager at IDAD Funds, Oracle will benefit from being part of an exciting sector. He told Techopedia:
“Like any company involved in artificial intelligence, they will be front and center of many an analyst’s interest at the moment. AI will most certainly be a game changer in much the same way that the internet was.”
However, this doesn’t mean that every company will automatically reward investors in the same way.
“AI is the future, but the future will determine who has made the most out of AI,” he added.
Attractions Could Change
Jason Hollands, a managing director at Bestinvest, told Techopedia that the attraction of Oracle could change over the next few years.
“It has long been seen as a relatively solid play in the tech space due to its high recurring earnings from licenses, but it could start to be seen as a lot more exciting if the company manages to accelerate exposure to AI amid the current frenzied excitement about it.”
Recent developments, he pointed out, have demonstrated what this could potentially do for the share price.
“Investors had their appetite whetted last month when Oracle announced it had closed multiple billion dollar deals for its Oracle Cloud Infrastructure (OCI) solution, which included a relationship with NVIDIA, the poster child AI stock,” he said. “It also recently announced a new partnership with SpaceX to launch an AI-powered tool that will map farmland and predict agricultural output.”
Stock Price Increases on a Strong AI-Related Demand
Its third-quarter profits beat Wall Street forecasts, and this sent shares higher, according to Keith Bowman, equity analyst at interactive investor. He said:
“Demand for its artificial intelligence servers helped lift sales at its biggest division, including new business from Windows software mammoth Microsoft.”
Investors have certainly benefited from their involvement with the company, according to Russ Mould, investment director at AJ Bell.
“Oracle’s shares are up by a fifth (earlier) this year and a third over the past twelve months, to leave them at a new all-time high,” he said. “The business software specialist is seen as a huge potential beneficiary of the rise of AI, thanks to its expertise in the cloud.”
Looking forward, the hope is that subsequent periods will be as strong as the third quarter figures released in March 2024. Mould said:
“Oracle flagged strong AI-related demand as a key driver of the business and investors and analysts will be looking for a strong end to the year, with the fourth-quarter results released in June.”
Oracle’s cloud-based software offerings are central to many businesses in running their finances, supply chains, and human resources departments, according to analysts at Jefferies.
“The new (AI) features are designed to save time for those people by generating reports, summarizing complicated data or drafting job descriptions, among other tasks,” they wrote.
Its quest has seen it spend billions of dollars on Nvidia chips and partnered with Cohere, an AI startup founded by ex-Google employees.
“For Oracle, a late comer to the cloud computing market, the features are a core part of its efforts to catch up to corporate software rivals such as Microsoft, which is also trying to woo business with its Copilot AI features,” they added.
Oracle Stock Predictions: Where Could the Price Go?
The ORCL stock is a ‘moderate buy,’ according to the views of 23 analysts compiled by MarketBeat as of April 3, 2024. Fourteen have ‘buy’ recommendations in place, while the remaining nine view it as a ‘hold.’
Their consensus 12-month ORCL stock price target is $130.76, which represents a potential 5.16% upside over the $124.34 closing price on April 2, 2024.
However, there is some disparity between Oracle predictions. The most optimistic believe it could go as high as $155, while the lowest forecasts come in at just $100.
Meanwhile, the Oracle stock forecast 2025 of algorithm-based WalletInvestor puts the stock at $140 in 12 months’ time.
Its five-year ORCL stock forecast, meanwhile, has it rising to $197.34. This would represent a 59% increase over the most recent $124.34 closing price.
Meanwhile, another algorithm-based prediction platform, GovCapital, expressed an even more bullish 5-year Oracle stock forecast, setting the ORCL target price at $601.972 for April 5, 2029.
Analysts and algorithm-based prediction platforms refrain from giving longer-term price targets. Therefore, Oracle’s stock forecast for 2030 is not readily available.
Note that analysts’ and algorithm-based projections might prove to be wrong.
Oracle History & Current Stand
The company, originally called Software Development Laboratories, was launched back in 1977 by engineers Larry Ellison, Bob Miner, and Ed Oates.
It went public in 1986 by floating on the NASDAQ exchange. Its initial public offering (IPO) was for 2,100,000 shares with a price of $15.
As of April 2024, Oracle is the fourth largest software company in the world, with a value of $341.74bn, according to CompaniesMarketCap.
It provides database technology and enterprise resource planning (ERP) to 430,000 customers in 175 countries while employing 136,000 people.
The Bottom Line: Should I Invest in Oracle?
Oracle shareholders have certainly enjoyed a strong start to 2024 thanks to an increase in both revenue and net income. The company is also intensifying its competition with its sector rivals by adding generative artificial intelligence features to its corporate software.
No one can deny it’s delivered an impressive performance and has been operating in what is expected to be a growth sector for many years.
Its focus now will be on its ability to maintain strong results in the next few quarters. Whether you should invest in Oracle stock will depend on your investment objectives.
Do your own research and always remember your investment decision depends on your attitude to risk, your expertise in the stock market, the spread of your portfolio, and how comfortable you feel about losing money.
The information in this article does not constitute investment advice and is meant for informational purposes only.
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References
- Oracle Announces Fiscal 2024 Third Quarter Financial Results (S23.q4cdn)
- Oracle and NVIDIA to Deliver Sovereign AI Worldwide (Nvidianews.nvidia)
- Jefferies Israel Group Global Tech Digest March 25, 2024 (Jefferies)
- Oracle (ORCL) Stock Forecast and Price Target 2024 (Marketbeat)
- Oracle Stock Forecast, “ORCL” Share Price Prediction Charts (Walletinvestor)
- Oracle stock forecast, ORCL price prediction: Buy or sell Oracle Corp. shares? (Gov)
- Investor Relations – FAQ (Investor.oracle)
- Market capitalization of Oracle (ORCL) (Companiesmarketcap)
- Largest software companies by market cap (Companiesmarketcap)
