Oracle Continues to Crash Lower and Lower But Two Bullish Desks Agree That Its Price WIll More Than Triple
Oracle has shed half its value in a year while racking up billions in negative free cash flow, yet two Wall Street desks just slapped $400 price targets on a stock trading at $126. Something has to give.
Oracle (NYSE:ORCL | ORCL Price Prediction) trades at $126.21. Wall Street’s average price target is $234.10, which means about 85.5% upside.
Oracle is best known for database software, but its main business now is leasing AI computing capacity to model builders. Cloud makes up 60% of total revenue. The gap between price and target is unusually wide. Two desks, Guggenheim and Mizuho, carry $400.00 targets, and that works out to about 3.17 times the current price. When the implied upside tops 40% and the stock has fallen more than 30% this year, investors need to know which side has the story right.
A Second $20 Billion Raise Tested Investor Patience
The latest blow was a new $20 billion common stock and senior notes offering. It came right after Oracle finished a $20B at-the-market equity program in its fiscal first quarter. Barron’s reported that the speed of the new raise surprised investors more than its size (Barron’s). Oracle shares have fallen 10.99% over the past month, compared with a 1.97% dip for the S&P 500.
Oracle needs the money because it is spending more cash than it brings in. First-quarter capex reached $28.5B and free cash flow came in at negative $5.4B. Interest expense rose 55% to $1.4B. Management did not provide a specific timeframe for getting free cash flow back above zero.
The damage goes back further than this offering. Shares are down 34.39% year to date and 50.4% over one year. That leaves the stock near the bottom of its 52-week range of $114.08 to $249.07.
A $664 Billion Backlog Keeps Analysts Bullish
The optimistic view rests on remaining performance obligations, or RPO, which is revenue already under contract but not yet recognized. Oracle’s RPO stands at $664B, up $209B YoY. Management expects around half of its RPO to convert into sales over the next 36 months. First-quarter revenue of $19.34B beat the $19.13B estimate, and cloud infrastructure revenue grew 121%.
Demand also looks strong. GPU utilization reached 97.9%, and GPUs that came up for renewal were re-signed or resold at a 20% premium. Chief Executive Clayton Magouyrk said, “Prices in a world where demand exceeds supply typically do not go down. They do go up.”
Of the analysts covering the stock, 7 rate it Strong Buy, 28 Buy, 7 Hold and 1 Sell. Earnings estimates have moved higher. For fiscal 2027, 35 upward revisions against 1 downward came in over 30 days, and the fiscal 2028 EPS consensus is $11.0401. The forward earnings multiple sits near 16.
Below the $400 outliers, other targets include Citizens at $285, Cantor Fitzgerald at $284 and Oppenheimer at $275. Every one of those models assumes the backlog turns into revenue on schedule and that dilution stays manageable. Price targets are one input to consider, and none of them is guaranteed.
Alphabet Is the Only Peer Sharing Oracle’s Pain
For the most part, Oracle fell on its own.
Microsoft (NASDAQ:MSFT) is up 7.73% year to date at $520.99. Its $633.13 target means 21.5% upside, with 52 Strong Buy or Buy ratings, 5 Holds and no Sells.
Alphabet (NASDAQ:GOOGL) fell 13.81% in a week to $280.03. That followed a third-quarter EPS miss and negative free cash flow. Its $402.73 target means 43.8% upside, and 53 of 58 analysts rate it Buy or better.
Amazon (NASDAQ:AMZN) is up 8.61% year to date at $250.69. Its $327.08 target means 30.5% upside, with just 2 Holds and no Sells.
Oracle has the largest implied upside in the group by a wide margin. That reflects how far the stock has dropped, and it also shows how much Wall Street is still banking on growth that has yet to come.
A 34% Slide While the Market Climbed
At $126.21, Oracle trades well below its $234.10 consensus target, an implied gain of 85.5% across 43 analysts. The stock is down 34.39% year to date, while the S&P 500 is up 10.63%.
Over one year, Oracle has lost 50.4% while the index has gained 10.4%. Shares rose 5.86% in the latest session, but they remain below the 50-day moving average of $141.80.
Backlog Points to Opportunity, Balance Sheet Calls for Caution
The upside scenario holds if the backlog converts on management’s 36-month timeline and new data centers hit the free cash flow conversion of “something like 100% of post-tax EBITDA” the CFO described. The risks mount if fundraising keeps exceeding revenue. Every raise dilutes shareholders and adds interest costs, and total liabilities already stand at $236B. The legacy software business, which slipped 3%, gives the company little buffer if that happens.
Shares trade at 16 times forward earnings while infrastructure revenue more than doubled. The $400 targets, though, need everything to go right. Keep an eye on next quarter’s free cash flow. If it improves, the gap could start to close.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
