TLDR
- Oracle stock rose 2.84% to $148.87 on Wednesday, its second consecutive day of gains
- Citi placed ORCL on a 90-day positive catalyst watch and reiterated a Buy rating with a $330 price target
- The recent selloff was partly driven by investor capitulation and technical selling pressure, according to Citi analyst Tyler Radke
- Oracle told the Deutsche Bank Tech Conference its cloud infrastructure is delivering real results for large enterprise clients
- TipRanks shows a Strong Buy consensus from 28 analysts, with an average price target of $257.79
Oracle (ORCL) stock closed at $148.87 on Wednesday, up 2.84% on the day, even as the broader market struggled. The S&P 500 slipped 0.02% and the Dow fell 0.21%.
The move came after Citigroup analyst Tyler Radke placed the stock on a 90-day positive catalyst watch. Radke reaffirmed a Buy rating and a $330 price target, which implies upside of roughly 122% from current levels.
Radke said the recent selloff went too far. He pointed to investor capitulation and technical selling pressure, including pressure around credit spreads and at-the-market share issuance, as key drivers of the drop.
Despite the carnage, Citi sees the underlying outlook improving. The bank cited growing demand for AI and potential tailwinds for margins and pricing across the cloud infrastructure space.
Oracle is now trading 56.94% below its 52-week high of $345.72, hit on September 10th. That gap is exactly what has some analysts thinking the risk/reward has shifted.
Deutsche Bank Conference Comments Add Support
Also on Wednesday, Oracle spoke at the Deutsche Bank Tech Conference. The company said its cloud infrastructure is delivering real results for large enterprise clients.
That commentary helped ease concerns about Oracle’s heavy debt load, taken on to build AI infrastructure for partners including Microsoft and OpenAI.
Citi noted that those AI demand trends could lead to estimate upgrades ahead of Oracle’s earnings and investor day in late October.
Technical Picture Turns Constructive
TipRanks’ Technical Analysis tool currently shows a Buy signal for ORCL. The overall read is based on 10 bullish, five neutral, and seven bearish signals.
The stock is trading above its 20-day exponential moving average of $143.31, which is itself a Buy signal. The Williams %R indicator also shows a Buy, suggesting the stock is not overbought and has room to move higher.
The Rate of Change sits at 0.26%, confirming an uptrend. The RSI stands at 51.19, placing ORCL in neutral territory.
On the Wall Street consensus side, TipRanks shows a Strong Buy rating based on 28 Buy ratings and four Holds over the past three months. The average price target is $257.79, implying 73% upside from current levels.
Wednesday’s trading volume came in at 17.9 million, well below the 50-day average of 32.4 million. Oracle outperformed peers on the day, with Microsoft rising 0.95% while Alphabet’s Class A and C fell 1.43% and 1.23% respectively.
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