Up 91% in 2025, Is It Too Late to Buy the Breakout in Oracle Stock?

After its blockbuster artificial intelligence (AI) forecast shocked Wall Street last week, Oracle (ORCL) is back in focus today thanks to news around a pending TikTok deal. Reportedly, the framework deal that includes both new and existing investors will keep Oracle’s cloud deal with the social media platform intact, per CNBC.

ORCL stock is up 4% this morning, bringing its year-to-date return to roughly 91%. The tech giant soared 35% in a single session last week after earnings, notching its best daily performance since 1992. 

While there’s still a massive bull gap on the chart, ORCL has consolidated some gains, with the 14-day Relative Strength Index (RSI) cooling down from its recent overbought high above 83, and the shares ducking back underneath their upper Bollinger Band.

What’s Behind the Breakout in ORCL Stock?

Oracle's recent performance has been marked by extraordinary growth, primarily driven by significant developments in its AI and cloud infrastructure initiatives. The company reported a remarkable 359% year-over-year increase in remaining performance obligations (RPO) to $455 billion, largely attributed to several multi-billion-dollar contracts, including a reported $300 billion deal with OpenAI.

Management's ambitious projections indicate Oracle Cloud Infrastructure (OCI) revenue will grow 77% to reach $18 billion in fiscal 2026, with further targets aiming for $144 billion by fiscal 2030. The company's cloud infrastructure revenue has already demonstrated strong momentum, climbing 55% year-over-year to $3.3 billion, while total cloud revenues increased by 28% to $7.2 billion. 

Oracle's strategic positioning in AI computing has been bolstered by partnerships with major players including OpenAI, xAI, and Meta (META), while their multicloud database revenue experienced an impressive 1,529% gain.

Can Oracle Turn Its Backlog Into Real Results?

The stock’s dramatic post-earnings rally briefly pushed Oracle's market capitalization near $1 trillion and temporarily made Chairman Larry Ellison the world's wealthiest person. However, the company faces significant challenges, including substantial capital expenditure requirements. Fiscal 2026 capex is expected to reach $35 billion to support cloud infrastructure expansion.

Despite Oracle's transformation from a traditional database provider to a key AI infrastructure player, the company still trails Amazon (AMZN), Microsoft (MSFT), and Google (GOOG) (GOOGL) in overall cloud market share. Financial metrics also reveal some concerns, including a high debt-to-equity ratio and negative free cash flow of $362 million in Q1, reflecting the significant financial commitments required to fund its growth plans. 

While Oracle's massive contracted backlog suggests high revenue visibility, successful execution in delivering substantial new cloud capacity remains crucial. The stock is currently rated a “Strong Buy,” on average, by the 37 analysts in coverage, but investors should note that the consensus price target of $326.12 suggests expected upside potential of only about 4.5% from here.