Valuation check for Oracle (NYSE:ORCL) after AI readthrough from Snowflake and Dell earnings

Oracle (ORCL) has been drawn into the recent AI-driven bull market as the stock reacts to strong earnings from Snowflake and Dell, which allayed fears that AI would erode subscription software models.

Check out our latest analysis for Oracle.

These AI readthroughs land in a stock that already has strong momentum, with a 30-day price return of 31.40% and a 1-year total shareholder return of 37.77%, building on very strong 3- and 5-year total shareholder returns.

If you’re paying attention to how AI themes are moving money in the market, it might be time to look beyond Oracle and check out these 47 AI infrastructure stocks.

Oracle’s stock is currently trading at $225.78 per share, with analysts’ average price targets indicating a slightly higher level, and certain intrinsic value estimates suggesting a wider gap. Is this a true entry point, or is the market already fired up for future growth?

Most popular story: 42.1% are underrated

The most popular story on Oracle points to a fair value of $389.81, compared to the previous closing price of $225.78, suggesting a large gap with expectations.

Oracle’s transformation story is one of strategic repositioning that culminated in the company’s emergence as the essential infrastructure partner for the world’s most demanding artificial intelligence (AI) workloads. This strategic shift, defined by massive infrastructure investments, a breakthrough partnership with OpenAI, and the rise of massive superclusters, has driven an unprecedented surge in contract backlog and fundamentally reshaped Oracle’s long-term growth trajectory and competitive landscape.

Read the whole story.

Curious about what’s behind the soaring fair value? This story relies heavily on rapid cloud growth, increasing contract balances, and richer margins built into future earning power.

Result: Fair value $389.81 (undervalued)

Read the full explanation to understand what’s behind the predictions.

However, this depends on whether Oracle can get its massive AI capacity build-up on track and whether customers can actually convert large contractual backlogs into sustainable, profitable use.

Find out about the key risks to this Oracle story.

next step

There’s a mix of optimism and caution in this story, so it makes sense to act quickly to see the numbers for yourself and form an independent view. You can get started with 3 important rewards and 2 important warning signs.

Looking for more investment ideas?

If Oracle has sparked your interest in AI and infrastructure, don’t stop there. Expand your watchlist now. Otherwise, you may miss strong themes that are emerging elsewhere.

This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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