Why Citi Analysts Are Bullish on Oracle Stock Now

Oracle (ORCL) is giving investors a fresh reason to revisit its cloud and artificial intelligence (AI) growth story after a brutal selloff pushed the stock sharply lower. Citi has now placed Oracle on an upside 90-day catalyst watch, maintaining a “Buy” rating and a $330 price target, arguing that the recent decline may have created an attractive entry point.

The bullish case centers on Oracle’s cloud business, where strong artificial intelligence (AI) infrastructure demand could drive better-than-expected growth, pricing, and profitability. Citi also sees Oracle’s upcoming earnings report and investor day in late October as potential catalysts for renewed investor confidence and upward estimate revisions. With the company having added around $85 billion sequentially in remaining performance obligations (RPO) in its May quarter, it remains to be seen whether accelerating AI demand can help the cloud business regain Wall Street’s attention and give ORCL stock room to rebound.

About Oracle Stock

Known for its pioneering relational database software and enterprise tools, Oracle has evolved into a powerhouse in cloud infrastructure, SaaS applications, hardware systems, and consulting services. Headquartered in Austin, Texas, the firm serves a global client base, and with a market capitalization of $434 billion, the company ranks among the world’s top software and cloud computing firms.

ORCL stock has staged a notable rebound in August, but shares remain deeply below their highs after a sharp selloff earlier this year. Oracle currently trades 56% below its 52-week high of $345.72.

On a broader performance basis, Oracle remains down about 37% over the past 52 weeks and down 23% year-to-date (YTD). The decline reflects a sharp correction that followed concerns about Oracle’s enormous AI infrastructure spending, free cash flow pressure, and the capital required to support its rapidly expanding cloud business. ORCL stock fell as low as $114.50 on July 28 before beginning a significant recovery.

The recent trend, however, has been considerably more encouraging. Oracle has gained 26% over the past month, rebounding from its July lows. The stock has also posted gains in recent sessions. Citi’s catalyst watch triggered an immediate positive reaction, with ORCL stock rising 2.8% on Aug. 26 and 2% on Aug. 27. Citi argued that the extreme selloff had created an attractive entry point and that improving AI demand could drive positive estimate revisions.

Meanwhile, the sharp monthly recovery also suggests investors may be beginning to look beyond Oracle’s near-term spending pressures and focus more closely on its cloud growth and massive AI-related backlog.

The stock is currently trading at a discount compared to peers and its own historical average at 23.4 times forward earnings.

Recent Financials Demonstrate Cloud Momentum

Oracle reported its fiscal fourth-quarter and full-year 2026 results on June 10. The company generated $19.2 billion in revenue, an increase of 21% year-over-year (YOY). Adjusted EPS came in at $2.11, up 24% YOY and above expectations.

Cloud remained the key growth engine. Total cloud revenue surged 47% YOY to $9.9 billion, while Oracle Cloud Infrastructure (OCI) revenue skyrocketed 93% to $5.8 billion, reflecting continued demand for AI workloads and large-scale cloud deployments. Meanwhile, software revenue declined 2% YOY as customers continued migrating from legacy software products to cloud-based offerings.

Plus, Oracle's RPO climbed 363% YOY to $638 billion, underscoring the company’s rapidly expanding backlog of cloud and AI-related business.

For fiscal 2026, Oracle delivered $67.4 billion in revenue, representing 17% YOY growth. Moreover, the company invested heavily to support that growth. Capital expenditures reached around $55.7 billion during fiscal 2026, exceeding management’s original target of $50 billion as the company aggressively expanded data-center capacity to meet surging AI demand.

For Q1 fiscal 2027, Oracle expects revenue growth of 27% to 29% YOY, while cloud revenue is projected to increase 57% to 63%, signaling that AI-related demand remains extremely strong. Furthermore, for fiscal 2027, Oracle reaffirmed its expectation of $90 billion in revenue, while raising its adjusted EPS outlook to $8.05 per share.

The main concern for investors is spending. Oracle reportedly expects fiscal 2027 capex of up to $95 billion, with around $70 billion funded directly by the company and another $20 billion to $25 billion expected to be reimbursed by customers. Management also plans to raise nearly $40 billion through debt and equity financing to support its expansion.

Analysts expect EPS to be around $6.49 for fiscal 2027, up 3% YOY, before surging 37% YOY to $8.89 in fiscal 2028.

What Do Analysts Expect for Oracle Stock?

In addition to Citi, many other analysts have also kept bullish stances on ORCL stock. On Aug. 24, DBS reiterated a “Buy” rating on Oracle with a $310 price target, implying substantial upside from recent trading levels. Mizuho also reiterated an “Outperform” rating on Aug. 21, citing developments around Oracle Health and a higher contract ceiling from the U.S. Department of Veterans Affairs.

JPMorgan recently maintained its “Overweight” rating on ORCL stock while trimming its price target to $200 from $210. Analyst Samik Chatterjee acknowledged concerns over aggressive cloud infrastructure spending and capital requirements but continues to see upside, arguing that Oracle is positioned to capitalize on the AI investment cycle.

Oracle stock has a consensus “Strong Buy” rating overall. Among the 44 analysts covering the tech stock, 33 recommend a “Strong Buy,” one has a “Moderate Buy,” nine analysts offer a “Hold” rating, and one recommends a “Strong Sell” rating. While the average price target of $251.50 indicates potential upside of 67% from current levels, the Street-high target of $400 suggests that the stock could rally as much as 165% from here.