Oracle Q2 Preview: Stock Up After 5 Of Last 7 Earnings Reports, Will Trend Continue Wednesday?
Technology giant Oracle Corporation (NYSE:ORCL) could serve as a bellwether for multiple sectors like big tech, AI, and cloud when the company reports second-quarter financial results on Wednesday after the market closes.
Here are the earnings estimates, what experts are saying ahead of the report and the key items to watch.
Earnings Estimates: Analysts expect Oracle to report second-quarter revenue of $16.22 billion, up from $14.06 billion in last year's second quarter, according to data from Benzinga Pro.
The company has missed analyst revenue estimates in seven of the last 10 quarters.
Analysts expect Oracle to report second-quarter earnings per share of $1.64, up from $1.47 in last year's second quarter.
The company has missed analyst estimates for earnings per share in three of the last four quarters, while beating estimates in seven of the last 10 quarters overall.
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What Experts Are Saying: A historic backlog for Oracle is one of the key highlights for the company heading into earnings, JPMorgan analyst Mark Murphy said in a new investor note.
The analyst said Oracle stock could be "due for a bounce."
Murphy maintained a Neutral rating on the stock with a price target of $270.
The analyst said the company has to balance its backlog with execution as shares sold off around 40% between Sept. 10 and Nov. 25, around the last quarterly earnings.
"In our view, sentiment has tended to swing too far and too fast in both directions without allowing for a reasonable assessment of middle-ground outcomes," Murphy said.
Murphy said Oracle showing an expanded list of AI customers could be a positive for investors. The analyst also said commentary on what is needed for spending over the next several years and clarification of the company's $300 billion contract with a customer could better help the valuation of the stock.
"In our view, a ‘clean in-line' quarter on revenue and cloud growth, coupled with clearer disclosure around RPO quality and contract durability, would likely be sufficient for the stock in the near term."
The analyst said the second quarter is "an important opportunity" for the company to share commentary on the near-term and on its multi-year roadmap.
Freedom Capital Markets Chief Market Strategist Jay Woods highlights the history of Oracle shares after recent earnings reports.
"It has risen after five of the last seven for an average gain of 17%, including a 36% rally last quarter," Woods said in a weekly newsletter.
Woods said it hasn't been strictly "smooth sailing" for Oracle shares since the last surge, with shares now down over 46% from their Sept. 10th peak.
"May investors fear that Oracle's aggressive push into AI-cloud infrastructure – especially its build-out for OpenAI – is being funded by mounting debt, not by operating profits."
The market expert said Oracle recently added billions in debt, which has investors worried that AI bets might not pay off.
"Shares have retreated and have become a focal point for those looking at AI growth."
Here are other analyst ratings for Oracle stock and their price targets:
- Barclays: Maintained Overweight rating, lowered price target from $400 to $330
- Citigroup: Maintained Buy rating, lowered price target from $415 to $375
- Deutsche Bank: Reiterated Buy rating, with price target of $375
- DA Davidson: Maintained Neutral rating, lowered price target from $300 to $200
- Baird: Maintained Outperform rating, lowered price target from $365 to $315
Key Items to Watch: After missing analysts’ revenue and earnings estimates for the first quarter, Oracle stock traded higher on strong guidance.
Shares later retreated amid several concerns, many of which were outlined by the experts above.
Along with concerns about reliance on OpenAI, Oracle could also face pressure, given that Gemini has been a bigger threat to OpenAI in recent weeks, which could limit the potential upside of being strongly aligned with OpenAI going forward.
Oracle guided its Cloud Infrastructure revenue to grow 77% to $18 billion in the current fiscal year. The segment is also expected to grow to $32 billion, $73 billion, $114 billion and $144 billion in the next four fiscal years, respectively.
As mentioned above, more color on how exactly the company will hit those targets and with whom it is partnered could go a long way in boosting the stock.
ORCL Price Action: Oracle stock is down 0.2% to $220.16 on Tuesday versus a 52-week trading range of $118.86 to $345.72. Oracle shares are up 32.6% year-to-date in 2025.
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