UBS maintains Oracle stock Buy rating, $210 target ahead of Q3 results

On Friday, UBS analyst Karl Keirstead reaffirmed a Buy rating and a $210.00 price target on Oracle stock (NYSE:ORCL), representing a potential 39% upside from the current price of $151.48. According to InvestingPro data, Oracle’s stock has experienced a significant 9.2% decline year-to-date, though it maintains a strong 33.2% gain over the past year. Keirstead’s optimistic stance comes as the company prepares to report its third-quarter earnings on Monday, March 10, 2025. The analyst has conducted approximately 15 checks with Oracle customers, partners, and an industry analyst to assess demand trends for the company’s offerings.

Despite a mixed macroeconomic environment and varied results from software industry peers, the feedback Keirstead received was predominantly positive, with no significant concerns raised. As a prominent player in the software industry with a market capitalization of $423.7 billion and impressive gross profit margins of 71.3%, Oracle continues to demonstrate strong fundamentals. The upcoming earnings report is expected to be heavily influenced by Oracle’s initial public commentary on its recent Stargate/OpenAI deal, which Keirstead believes could act as a positive catalyst for the stock. For deeper insights into Oracle’s valuation and growth prospects, InvestingPro subscribers have access to 14+ additional exclusive tips and comprehensive financial analysis.

The research conducted by UBS suggested stable or growing spend on Oracle’s services, with no evident pressure points. This aligns with Oracle’s recent performance, showing revenue growth of 6.4% and maintaining an EBITDA of $22.3 billion in the last twelve months. In terms of specific segments, there was constructive feedback on the core demand for Oracle Cloud Infrastructure (OCI), with several Fortune 500 customers indicating significant upcoming OCI projects. Additionally, there were no signs of capacity constraints. While there was broad interest in Oracle’s Database@Azure, the timeline for migrations seems to be extending, with starts now anticipated in the second half of 2025 or 2026.

The feedback on Oracle’s Software (ETR:SOWGn) as a Service (SaaS) segment was more subdued, indicating stability rather than acceleration. Despite this, Keirstead’s current quarter consensus estimates remain unchanged. For the third quarter ending in February, UBS is modeling a total revenue growth of 10-11% (within the company’s guidance of 9-11%), Infrastructure as a Service (IaaS) growth of 57% (marking a 5-point sequential acceleration), and SaaS growth of 11% (a 1-point sequential acceleration). For comprehensive analysis of Oracle’s financial health and detailed valuation metrics, explore the full InvestingPro Research Report, part of our coverage of 1,400+ top US stocks.

In other recent news, Oracle Corporation is set to report its third-quarter earnings on March 10, 2023, with analysts from TD Cowen maintaining a Buy rating and a price target of $210. The firm projects Oracle will achieve a 10% constant currency growth, partly due to its new Stargate partnership and increased data center leasing activity. Oracle’s collaboration with OpenAI and SoftBank (TYO:9984) in the Stargate venture is advancing, with plans to establish new data center campuses in Texas to support AI infrastructure. Additionally, Oracle and Google (NASDAQ:GOOGL) Cloud have announced the expansion of their regional presence with eight new regions planned over the next year. This expansion will include enhancements to Oracle Database@Google Cloud, focusing on resilience and flexibility. SoftBank has also announced a joint venture with OpenAI in Japan, named SB OpenAI Japan, aimed at providing AI services to corporate clients. Meanwhile, the sale of TikTok, owned by ByteDance, is delayed as the company awaits approval from the Chinese government amid ongoing trade tensions with the U.S.

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