Oracle Eyes Best Day Since '99 on Blowout Forecast - Buy Now?

In after-hours trade on Tuesday, Oracle Corporation’s ORCL shares surged to record highs following the announcement of several billion dollars of contracts signed in its recently reported quarter, fueling optimism for future growth. So, is it appropriate to invest in Oracle stock now? Let’s have a look –  Oracle Stock Skyrockets in After-Hour Trading On Tuesday’s extended trading session, Oracle saw its share price soar an impressive 31.8%, and if the stock could maintain such momentum in Wednesday’s regular trading session, it would blow past its previous record high of $256.43 achieved on Aug. 6.  Such a remarkable rally would result in Oracle’s best one-day performance since June 1999, per FactSet. It would also help Oracle become the first U.S. firm with a market capitalization of over $500 billion to gain more than 25% in a single session, per Dow Jones Market Data, citing a MarketWatch article. As of Tuesday’s close, Oracle’s shares have jumped 77.7% year-to-date, way more than the Computer-Software industry’s gain of 15.3%. The Oracle stock also rose at a seven times faster pace than the broader S&P 500 index.Image Source: Zacks Investment ResearchWhat Led to the Rise in Oracle’s Share Price? On Tuesday, Oracle reported its fiscal first-quarter 2026 results after market close. Its total revenues of $14.9 billion for the quarter ending on Aug. 31 were up 11% year over year. However, the numbers fell short of Wall Street’s projections. Net income was essentially flat at $2.93 billion, or $1.01 a share, in comparison to $2.93 billion, or $1.03 a share, in the same quarter the previous year. But it wasn’t the fiscal first-quarter revenue miss that grabbed investors’ attention. Instead, Oracle’s shares rose higher due to a sharp increase in bookings and the company’s upbeat outlook for its cloud infrastructure business. Oracle’s remaining performance obligation (RPO) was $455 billion in the fiscal first quarter, up a whopping 359% from a year ago. This was primarily due to the company signing four multi-billion-dollar contracts with three separate customers in the reported quarter. In July, Oracle inked a deal with OpenAI to build 4.5 gigawatts of data center capacity, which would be sufficient to power millions of U.S. homes. It is one of the few deals that helped boost Oracle’s RPO. Additionally, Oracle’s CEO, Safra Catz, said that the company is well-positioned to further sign multi-billion-dollar deals, which would help its RPO exceed $500 billion over the next few months. Catz added that Oracle’s cloud infrastructure business is projected to grow 77% to $18 billion in the current fiscal year, and would reach $32 billion by fiscal 2027, $73 billion by fiscal 2028, $114 billion by fiscal 2029 and $144 billion by 2030. Importantly, most of the five-year projected revenues are included in Oracle’s reported RPO, meaning any fresh contracts will push the growth targets even higher. Record Surge for Oracle — Should You Jump In? Oracle’s RPO is likely to surpass half a trillion dollars. Moreover, with deepened partnerships with tech behemoths, such as Microsoft Corporation (MSFT), Amazon.com, Inc. AMZN and Alphabet Inc. GOOGL, leading to an increase in cloud infrastructure revenues, stakeholders should have strong reasons to hold onto the stock for potential long-term gains.  However, Oracle’s capital expenditures are estimated at $35 billion for the fiscal year, and this may lead to cash outlays, putting pressure on the company’s financials. Moreover, Oracle’s debt-to-equity ratio is at 406.8%, way higher than the industry average of 20.6%, signaling heightened financial risk and increased susceptibility to economic slumps. Hence, new investors should exercise caution before placing bets on Oracle stock. Image Source: Zacks Investment ResearchCurrently, Oracle stock has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.See our %%CTA_TEXT%% report – free today!7 Best Stocks for the Next 30 DaysWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Oracle Corporation (ORCL): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks