Oracle Stock Soars: AI Boom Could Push Shares Past $400

The catalyst for Oracle’s dramatic revaluation was a quarterly earnings report that stunned the market. Described as one of the best and most shocking quarters from a large-cap firm, the results were highlighted by a ‘shockingly high cloud bookings figure’ that sent analysts back to the drawing board. For a company founded decades ago, a 35% single-session gain is a rare event, signaling a fundamental shift in how the market perceives its growth trajectory. The momentum continued with a further 6% rise on Monday following news that Oracle will provide cloud services for America’s version of TikTok, underscoring the company’s ability to secure high-profile infrastructure contracts.

This surge has had a profound personal impact on CEO Larry Ellison, whose wealth has skyrocketed alongside the stock, briefly making him the richest person in the world. More importantly for investors, the rally has put Oracle on the radar as a serious contender to join the elite $1 trillion market cap club, a milestone currently dominated by the ‘Magnificent Seven’ tech titans. The fact that Oracle achieves this from outside the Nasdaq exchange and without the same hype as its peers makes its ascent all the more remarkable, suggesting a move based on tangible financial performance rather than mere speculation.

In the wake of the earnings blowout, Wall Street analysts have been aggressively raising their price targets for ORCL stock. The current Street-high target of $410 per share, held by Citi analyst Tyler Radke, implies a further 25% upside from recent levels. This target is not an outlier; other analysts have also set targets at or north of $400. These projections represent a dramatic reassessment for a stock that was trading as low as $223 per share in early September, highlighting how rapidly the narrative around Oracle has changed.

However, the article posits a critical question: are these raised targets still too conservative? The core of the bull case rests on the idea that the AI boom is evolving. The initial wave, dominated by chipmakers like Nvidia, is now giving way to a second wave focused on the software and infrastructure required to deploy AI at scale. Oracle, with its vast cloud infrastructure business, is positioned to be a primary beneficiary. If the company continues to secure major AI infrastructure contracts and partnerships, the current blistering pace of the stock could continue well into the end of the year and beyond, potentially making even the $410 target seem modest.

Despite the euphoria, Oracle’s valuation demands scrutiny. The stock now trades at a premium 45.3 times forward price-to-earnings (P/E) ratio, a level that would typically signal overvaluation. The article argues, however, that in the context of the AI boom, the P/E multiple may not tell the full story. When measured against the potential for explosive growth in cloud infrastructure demand and the profitability of new AI use cases, Oracle could still be considered ‘modestly priced’ in a bull-case scenario. The underlying premise is that the market is pricing in future growth that has yet to materialize fully on the income statement.

This optimism is tempered by acknowledged risks. The author explicitly notes that ORCL is ‘one of the names at risk of a rapid retreat if there is an AI bubble, and it does finally go bust.’ The current momentum is fueled by a ‘fear of missing out’ (FOMO) among businesses increasing their AI infrastructure spending to avoid falling behind. This dynamic is powerful but can reverse quickly if AI adoption slows or fails to meet profitability expectations. For now, the prevailing sentiment is that ‘there’s more growth to be had,’ but investors must remain cognizant of the speculative forces driving the rally. The journey to $400 is plausible, but it is paved with both immense opportunity and significant volatility.