Oracle's Stock Outlook: A Look Ahead to 2026

Oracle Corporation (ORCL), a prominent player in database software, has recently surprised many investors with its impressive growth trajectory, particularly in the cloud sector.

Is Oracle's stock set for further growth over the next three years? Let's explore the company's recent performance and future prospects.

Oracle's Growth Journey

For years, Oracle was viewed as a traditional tech giant with sluggish growth. However, the company has made significant strides by transitioning its on-premise applications to cloud-based solutions. This strategic shift has helped Oracle compete with its cloud rivals and expand its offerings in various sectors such as enterprise resource planning (ERP), healthcare IT, and infrastructure services.

As a result of these efforts, Oracle has seen its revenue and earnings per share (EPS) post compound annual growth rates (CAGR) of 3% and 5%, respectively, over the fiscal years 2014 to 2024. Additionally, the company has aggressively repurchased more than a third of its shares, which has contributed to its strong market position.

Recent Performance Highlights

In the last three fiscal years, Oracle's performance has shown a mixed bag. The EPS fell in fiscal 2022 due to a major tax benefit the previous year. However, profits surged in fiscal 2023 and 2024, demonstrating the company's resilience.

Metric	FY 2022	FY 2023	FY 2024
Revenue Growth	5%	18%	6%
EPS Growth	(47%)	27%	21%

The significant revenue growth in fiscal 2023 can largely be attributed to Oracle's acquisition of Cerner, a leading healthcare IT institution. Furthermore, the company’s cloud infrastructure platform has played a vital role in its recent achievements by allowing businesses to manage data and AI workloads efficiently.

Looking Forward: What's Next for Oracle?

Oracle is positioning its cloud infrastructure platform, Oracle Cloud Infrastructure (OCI), as its main growth engine. Although it is smaller than major players like Amazon Web Services (AWS) and Microsoft Azure, OCI serves high-profile clients such as Nvidia, Uber Technologies, and TikTok, which indicates its growing relevance in the market.

The increasing demand for AI resources is expected to further boost Oracle's cloud business. Analysts are projecting a revenue CAGR of about 12% and an EPS CAGR of approximately 20% from fiscal 2024 to fiscal 2027. Although Oracle's stock may appear somewhat expensive at 32 times its forward earnings, the underlying growth potential could warrant this valuation.

If Oracle continues to perform well and achieves a 20% CAGR in EPS by fiscal 2029, with a steady forward P/E ratio of 30, its stock could potentially surge by 65%, reaching around $280 by calendar 2028. This may not match the explosive growth Oracle has seen over the past few years, but it presents a stable opportunity aligned with the ongoing expansion of cloud and AI markets.

Investors can look at Oracle as a steady performer in a sector known for volatility. As it navigates the growing demand for cloud services and AI solutions, Oracle appears well-positioned for continued growth.

Oracle, Cloud, Investment