ORCL Stock Earnings Preview: Will Stargate Super-charge Oracle?

Introduction

Founded in 1977, Oracle [ORCL] is an Austin, Texas-based cloud software firm known for debuting the world’s first autonomous database. 

Today, it provides artificial intelligence-powered (AI) cloud applications to support enterprise IT environments worldwide. 

Oracle’s tools help companies as varied as Cisco [CSCO] and Netflix [NFLX] manage resource planning, supply chains and workforce performance. The company has benefited from the wider AI boom and looks positioned to tap into growing demand for AI services and infrastructure. 

Amid increasing macroeconomic volatility, and ahead of the company’s Q3 2025 earnings report on March 10, let’s review ORCL stock’s recent performance. 

Stargate or Bust? 

The company has benefitted from both the software-as-a-service (SaaS) and AI booms in the past decade, making its Co-Founder and Chief Technology Officer Larry Ellison the fourth-richest man in the world, just behind Amazon’s [AMZN] Jeff Bezos. 

On January 21, 2025, the Trump administration announced the $500bn Stargate initiative, a joint venture between OpenAI, SoftBank [SFTBY] and Oracle intended to support the construction of data centers in the US to boost AI capabilities. Oracle has reportedly committed $7bn in initial funding and is the initiative’s “key initial technology partner”.

On January 25, Oracle was named as a primary player in a plan to buy TikTok, according to which ByteDance would retain a minority stake while Oracle oversaw the app’s algorithm, data collection and software updates. 

As competitors race to create general-purpose AI agents, Oracle’s ongoing releases hint at a different strategy. On February 6, the firm added a new set of AI tools to its NetSuite corporate finance software platform, aimed at speeding up common but tedious tasks. 

Riding the AI Wave

Barrying a brief peak in the 2000s, sharp growth for ORCL stock began with a rally in the 2020s that it has yet to turn back from. 

An all-time high set in December 2021 was surpassed in mid-2023 and again in November 2024 in the aftermath of the election of President Donald Trump. 

ORCL stock has been somewhat more volatile in recent months, sinking some 19.18% in the month following the release of Q2 2025 results on December 10, before turning around with the release of Chinese AI model DeepSeek. The stock spiked on the January 21 announcement of the Stargate initiative, but has largely traded flat since. 

As of February 28, ORCL stock was up 50.70% in the past 12 months and down a marginal 0.1% in the year to date. 

How Does Oracle Compare with Competitors?

As an enterprise software provider with both AI and cloud capabilities, Oracle competes with a number of other prominent SaaS stocks, including Salesforce [CRM] and SAP [SAP]. 

Oracle missed analyst expectations for both EPS and quarterly revenue in Q2, with 8.6% quarterly revenue growth to $14.06bn falling short of forecasts of $14.12bn. However, the company emphasized the 52% rise in Oracle Cloud Infrastructure revenue, citing “record level AI demand”. GPU consumption was also up 336% in Q2, representing another key element in the company’s business.

When Salesforce released earnings on February 26, it reported its first $10bn quarter, up 8% year-over-year, with a total of $37.9bn in revenue for FY 2025. These record figures were driven by a nearly 120% increase in data cloud and AI annual recurring revenue, as well as the successful introduction of Agentforce, the company’s AI agent platform. 

SAP, meanwhile, recorded a strong Q4 upon its earnings release on January 28, despite a 20% fall in operating profit and a 14% decrease in EPS for FY 2024. The German firm recorded record cloud backlog of €63bn, up 40% year-over-year, as well as a return to double-digit revenue growth. 

Source: Yahoo Finance

Despite its larger market cap, Oracle’s projected growth rate for the next year outstrips both Salesforce’s and SAP’s, whereas SAP’s considerably higher P/E ratio suggests it might be overvalued. 

ORCL Stock: The Investment Case

The Bull Case for Oracle

The firm also boasts partnerships with big players in the AI field — most recently Meta [META], which will become a customer of Oracle Cloud from Q3 2025. This highlights the demand for its AI training infrastructure and cloud services. Oracle’s other AI customers include OpenAI, xAI, Nvidia [NVDA] and Cohere. The massive sums companies are willing to put toward AI development suggest that Oracle’s may be able to continue growing.

Of the 40 analysts surveyed by TradingView in the past three months, 21 rated ORCL stock a ‘strong buy’, while four rated it a ‘buy’. The average price target of $198.34 represents a 19.44% upside from February 28’s close.  

The Bear Case for Oracle

Part of Oracle’s advantage in the AI infrastructure market is its access to Nvidia’s H800 GPUs amid an industry-wide capacity shortage. However, DeepSeek’s success using slightly more than 2,000 such GPUs could diminish Oracle’s competitive advantage. According to Bank of America analyst Brad Sills, “easing capacity constraints could impact demand for GPU rentals and Oracle’s [current remaining performance obligations] growth.”

Similarly, disappointing Q2 earnings might have investors looking warily to Oracle’s earnings call on March 10. If the company underperforms, the resulting fallout could take a significant chunk out of its current market value. The minimum estimate for ORCL stock of $130 represents a downside of 21.72% from February 28’s close.

Conclusion

Oracle’s strategic approach to partnerships has kept it in the headlines in recent months. There is a significant opportunity to scale up its role in providing the infrastructure to train AI models. However, the future of the AI boom is uncertain, while competition from China is increasing.