Oracle stock is gaining momentum ahead of a crucial earnings report, and investors seem to be betting that surging demand for artificial intelligence infrastructure could strengthen the company’s cloud growth story.
Oracle shares closed Friday at $158.78, up 3.08%, before climbing another 4.7% to about $166.25 in Tuesday premarket trading. The move extends a three-session rally of more than 12% thanks to enthusiasm around Oracle’s relationship with OpenAI.
Oracle’s stock price over the past week (Source: CoinCodex)
A major catalyst is OpenAI’s newly launched GPT-6 Astra. Oracle is one of the infrastructure providers positioned to benefit from rising demand for the computing power needed to train and run advanced AI models. OpenAI and Oracle are tied through a massive cloud agreement reportedly worth $300 billion.
Wall Street sentiment is also improving. Morgan Stanley recently increased its Oracle stock price target to $210 from $207 while maintaining a Neutral rating. Bank of America is even more bullish, and maintained a Buy rating and $240 target.
Oracle Earnings Could Decide the Next Move
Oracle will report its fiscal first-quarter 2027 results after Thursday's closing bell. Analysts expect revenue to jump roughly 28% year over year to $19.13 billion, while adjusted earnings are projected to rise around 29% to $1.30 per share.
Cloud infrastructure will likely be the biggest number to watch. Oracle Cloud Infrastructure revenue surged 93% in the previous quarter, but Morgan Stanley expects growth closer to 63% this quarter, within Oracle's projected 58%-65% range.
Investors will also scrutinize Oracle's enormous $638 billion remaining performance obligation backlog. That backlog sheds some light on the scale of contracted demand, but Wall Street wants evidence that those contracts can translate into revenue, earnings and cash flow quickly enough to justify Oracle's aggressive data center spending.
That remains the biggest risk to the rally. Oracle spent $55.6 billion on capital expenditures during fiscal 2026 as it expanded AI infrastructure. This contributed to negative free cash flow and increasing financing requirements. Volatility could therefore remain high.