Shares in the software giant, which was co-founded 47 years ago by current executive chairman and chief technology officer Larry Ellison (80), are up almost 60% this year. A chunk of those gains came after last month's estimate-beating earnings and forecast for sales to roughly double over the next five years.
Two recent analyst upgrades have left Wall Street at its most bullish in more than six years, with 24 firms rating Oracle shares a buy.
The newfound popularity has come as Oracle cements its status as an AI winner. It's been focused on expanding its cloud infrastructure business - which competes with Amazon.com, Microsoft and Google - and has developed a reputation for success with generative AI workloads, helping to boost its overall revenue growth.
"Growth is inflecting higher, at a pace much faster than we've been used to at Oracle, and that's a huge positive," said Dan Eye, chief investment officer at Fort Pitt Capital Group. "At the same time, it's been something of an under-the-radar name, and while the valuation has recently risen, it is still cheaper than other tech names."
Oracle's stock rally this year - adding more than US$170-billion in market value - has boosted its valuation to 26x forward earnings, up from about 18x at the beginning of the year. That's still cheaper than some larger peers such as Microsoft and Amazon, and it isn't deterring analysts and investors.
