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 dip in post-earnings, 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.

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.

Oracle Extends 19c Database Support

Oracle has extended support for its widely used 19c database as users wait for an on-prem version of its latest 23ai database.

In a statement last month, Oracle pushed the 19c support cutoff to December 31, 2029, for Premier Support and Dec. 31, 2032, for Extended Support.

19c is the most recent “Long Term Release,” while 21c is an “Innovation Release” with limited support. Oracle had initially provided Premier Support for 19c until April 2024 and Extended Support until April 2027, waiving Extended Support fees until April 2026 in 2023.

Oracle did not explain why it extended Premier Support for 19c.

In May, Oracle released 23ai, introducing new features like a native VECTOR datatype, but did not commit to an on-prem version beyond Exadata and Oracle Database Appliance (ODA).

Some expected a mainstream release soon, but nine months later, no on-prem version has been announced.

The latest update confirms no plans, listing platforms like Supercluster, Linux, and Solaris as “TBA.”

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 13% premium from the current value of $179.83.

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.

Over the past three months, 27 Wall Street analysts have provided 12-month price targets for Oracle. The consensus average target is $192.88, with the highest forecast at $220.00 and the lowest at $130.00.

This average target suggests a potential increase of 7.27% from Oracle’s most recent price of $179.83.

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.

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.

Projections suggest that Oracle’s stock could hit $176.80 by 2030, $431.86 by 2040, and $567.73 by 2050.

For 2035, Oracle is anticipated to reach an average price of $355.33, with a high estimate of $356.75 and a low of $338.11. This would represent a significant increase of 98% from the current price of $179.83.