TLDR
- Oracle stock rose around 3.5% to 4.5% Wednesday after Citi analyst Tyler Radke opened a positive catalyst watch on the stock.
- Citi kept its Buy rating and $330 price target, calling the selloff “four to five standard deviations” from Oracle’s historical volatility.
- The stock had fallen over 50% from its June peak to July trough on concerns over heavy AI spending and rising debt.
- Citi raised its fiscal 2028-2030 revenue and earnings estimates, pointing to AI demand and improving credit signals.
- Oracle’s $85 billion backlog and a scheduled investor day in late October add to the near-term catalyst picture.
Oracle stock climbed as much as 4.5% Wednesday morning after Citi analyst Tyler Radke put a positive catalyst watch on the stock, calling the recent selloff one of the most extreme in the company’s history.
Radke kept his Buy rating and $330 price target. Oracle was trading around $147 at the time of writing, well below that target.
The stock had lost more than 50% from its June peak to its July trough. Radke described the move as “four to five standard deviations” against Oracle’s typical volatility, compressed into just 30 to 40 trading days.
That kind of drop, Citi argues, has created a rare entry point for investors.
The selloff was driven by concerns over Oracle’s heavy spending on AI infrastructure for clients including Microsoft and OpenAI, as well as a sharp rise in debt. Over five years, Oracle’s debt load has grown 60%. Free cash flow swung from positive $13.8 billion to negative $23.7 billion in that same period.
Analysts expect Oracle to burn through another $90 billion over the next two years.
Citi Sees the Bad News as Priced In
Despite those numbers, Citi believes the worst is already reflected in the stock price. The bank pointed to “insatiable” demand for AI services and Oracle’s $85 billion backlog, which it says is nearly enough to cover the company’s near-term cash needs.
Citi also raised its revenue and earnings estimates for fiscal years 2028 through 2030. By 2030, Citi projects Oracle could earn $22 per share, which would represent a triple or even quadruple of current GAAP earnings.
Improving credit signals are also part of the story. Citi noted that bond spreads and credit default swap spreads have started to recover, suggesting that forced selling pressure may be easing.
Investor Day and Earnings in Focus
Oracle is set to report earnings in September and holds a scheduled investor day in late October. Citi’s note flagged both events as potential positive catalysts.
The day before Wednesday’s move, Oracle also presented its distributed cloud strategy at an industry summit, reinforcing its enterprise AI positioning.
The broader market offered little help. The S&P 500 added just 0.1% and the Nasdaq was nearly flat, making Oracle’s gain clearly stock-specific.
Within enterprise software, SAP fell over 3% after a UBS downgrade to Neutral, which may have made Oracle look relatively more attractive on the day.
Oracle’s consensus rating among analysts remains a Buy. The stock’s 52-week range runs from $114.50 to $345.72, putting it still far below its recent highs.
At a price-to-earnings ratio of under 25 with five-year growth estimated at 27% annually, Citi’s $330 target implies the stock has room to more than double from current levels.
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