Oracle Stock Price In 5 Years: ORCL Remains Buy Despite Disappointing Earnings

• Oracle’s Cloud Services segment, particularly Cloud Infrastructure, has continued to show impressive growth, driven by increasing AI demand.
• While Oracle exceeded earnings per share expectations, revenue fell short of analyst forecasts.
• Despite the post-earnings dip, analysts remain optimistic about Oracle’s long-term growth prospects.

Oracle’s second-quarter earnings report  saw mixed results. While the company delivered solid revenue growth and strong earnings, it fell short of analyst expectations.

However, the surge in Cloud Infrastructure revenue, fueled by artificial intelligence (AI) demand, signals a promising future for the tech giant. Analysts confirmed their positive views on ORCL stock.

Oracle Posts Disappointing Third-Quarter Results

Oracle (ORCL) reported second-quarter revenue of $14.06 billion, a 9% year-over-year increase. However, it fell short of analyst expectations, causing shares to drop by over 7%  in after-hours trading on the release day.

Net income rose to $3.2 billion or $1.10 per share from $2.5 billion or 89 cents per share a year earlier, surpassing estimates . However, adjusted earnings per share of $1.47 slightly missed forecasts.

The Cloud Services segment grew by 12% year-over-year to $10.81 billion. In comparison, Cloud Infrastructure revenue surged by 52% to $2.4 billion, driven by what CEO Safra Catz described as “record-level AI demand.”

This includes an expanded partnership with Meta to leverage Oracle’s AI Cloud Infrastructure to develop AI agents using Meta’s Llama language model.

The results follow Oracle’s recent stock rally, fueled by optimism about its AI growth potential. Despite the decline in post-results, shares are up by more than 80% in 2024.

Analysts Confirm Positive Views

Despite dropping shares, analysts remain confident in Oracle’s future performance. Citi  analysts expressed skepticism, noting a lack of “meaningful upside” in Oracle’s total cloud revenue. However, the firm retained a ‘neutral’ rating but raised its price target to $194. This represents a 10% premium from the current value of $177.74.

Deutsche Bank maintained  a ‘buy’ rating with a $200 price target. It highlighted Oracle’s “very solid” second-quarter results driven by both AI and non-AI successes. Meanwhile, Oppenheimer  kept a ‘perform’ rating, citing less impressive overall results than recent quarters but acknowledging robust growth in Oracle Cloud Infrastructure.

Deutsche Bank also praised the addition of Meta as a significant customer in Oracle’s AI portfolio.

Wall Street analysts’ 12-month price targets  for Oracle average $192, with a high forecast of $220 and a low of $140. This represents an 8.0% upside from the current price of $177.74. Of the most recent analyst ratings, 38% recommend a ‘buy,’ 16% suggest a ‘hold.’ No analyst rates the stock as a ‘sell.’

Where Will ORCL Stock Be In Five Years?

With a positive operating and financial outlook , Oracle is well-positioned to become a trillion-dollar company potentially. Currently valued at $465 billion, Oracle stock would need to rise by approximately 115% to reach that milestone.

Earnings growth has historically been a key driver of stock prices, and Oracle is showing strong potential in this area. The company aims to achieve revenue exceeding $104 billion by fiscal 2029—nearly double the $53 billion recorded in fiscal 2024. And it projects annual EPS growth above 20% over the next five years.

If Oracle stock aligns with these financial trends, delivering an annual return of about 16.5%, it could achieve a market capitalization of $1 trillion by fiscal 2029, corresponding to a stock price of approximately $358. The stock has delivered annualized returns of 27% since 2019.

Oracle shares trade at 27 times the consensus forward EPS estimate of $6.29 currently. Assuming EPS reaches $12 by 2029, a price-to-earnings (P/E) ratio of 30 would support the stock price required for a trillion-dollar valuation.

According to StockScan’s analysis  of Oracle’s financial performance and earnings trajectory, the stock could approach $176.80 by 2030, reflecting steady long-term growth potential.