Oracle (ORCL) shares have climbed roughly 30% from their July low, and technical signals suggest the stock may have found a floor. The rebound comes as Nvidia's blockbuster earnings reinforced confidence in the AI infrastructure buildout, a key growth driver for Oracle's cloud business.
Recent price action and technical setup
ORCL traded near $149 on Thursday, up from a low of $114 earlier this month. The stock has formed a double-bottom pattern on the weekly chart, with support at $115.12—a level that held in April 2024 and again in July 2025. This pattern often signals a potential trend reversal.
The stock is also attempting to reclaim its 200-week exponential moving average, a move that would strengthen the bullish case. If the rally continues, the next targets are the psychological $200 level and then the June 1 high of $250. However, a drop below $115 would invalidate the bullish setup.
AI demand remains robust
Nvidia's latest results provided a fresh catalyst for AI-related names. The chipmaker reported revenue of $96 billion in its fiscal second quarter, up sharply year-over-year, and guided third-quarter revenue to $106 billion. This suggests that spending on AI infrastructure remains strong, which bodes well for Oracle's cloud and AI services.
Oracle has been expanding its data center capacity to meet surging demand, and its backlog is growing. The company's Remaining Performance Obligations (RPO) are expected to be a key metric when it reports earnings in September.
Analyst sentiment turns positive
Several Wall Street firms have recently expressed optimism on Oracle. Citigroup's Tyler Radke reiterated a Buy rating, noting the stock's valuation has become more attractive. UBS maintained its Outperform rating, while Wedbush and Bernstein raised their price targets to $240 and $325, respectively. Moffett Nathanson also set a target of $325.
These bullish calls come after a prolonged decline that saw ORCL fall over 56% from its all-time high, even as the broader market hit record levels. Concerns about Oracle's debt load—now over $129 billion—and its exposure to OpenAI had weighed on the stock.
Earnings expectations
Oracle is scheduled to report fiscal Q2 2025 earnings in September. Analysts expect revenue of $19.12 billion, up 28% year-over-year, with EPS projected at $1.52. For the full year, revenue is forecast to grow 33% to $89 billion, followed by another 46% jump to $130 billion in fiscal 2026.
Earnings per share are expected to rise to $8.06 this year and $10.93 next year. The company's forward P/E ratio has compressed to around 18, below the sector median of 22.9 and its five-year average of 22, suggesting the stock may be undervalued relative to its growth prospects.
Risks remain
Despite the positive technical and fundamental signals, risks persist. Oracle's debt levels are high, and its bonds trade near junk status. The company plans to raise over $40 billion in additional debt and equity, which could dilute shareholders. Additionally, competition in the cloud market remains intense, and any slowdown in AI spending could impact growth.
Investors will be watching the upcoming earnings report for updates on cloud revenue growth, RPO, and management's guidance. The results could either confirm the bullish thesis or reignite concerns.
This article is for informational purposes only and does not constitute financial advice.
