Oracle: You Didn't Miss It, There's Still 40% Upside

Passage Research 6.22K Followers Follow Summary Oracle delivered a strong quarter, beating revenue and EPS expectations, with accelerating cloud infrastructure growth and robust AI-driven demand. Despite a 770bps y/y gross margin decline and negative free cash flow, I view these as temporary, with capex needs not increasing alongside $30B in new cloud bookings. I maintain a Strong Buy rating and raise my price target to $215, reflecting 40% upside, as ORCL trades at a discount to peers despite 30%+ EPS growth potential. Key catalysts include the upcoming October 28 investor day, where new agentic AI accelerators will be unveiled to drive further adoption and efficiency. PM Images/DigitalVision via Getty Images In my last article on Oracle ( ORCL ), I See 64% Upside And A Whole Lot Of Fear , I outlined why I had thought the YTD slide had finally come to an end. The This article was written by Passage Research 6.22K Followers Follow Passage Research focuses on identifying variant perception through a blend of fundamental analysis and alternative data. The research process combines detailed financial modeling with real-time datasets to underwrite earnings power, margin durability, and forward expectations.The author has spent over a decade on Wall Street, most recently spending the last five years working in the hedge fund industry as an analyst. Typical coverage spans consumer, TMT, industrials and special situations, with an emphasis on asymmetric risk/reward and catalyst-driven opportunities. Analyst’s Disclosure: I/we have a beneficial long position in the shares of ORCL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.