Oracle Stock In Spotlight After Analyst Says Market ‘Materially Overestimates’ Worth Of Cloud Contracts
Synopsis
Analyst Alex Haissl noted that Oracle’s projections for cloud revenue over the next five years indicate a total valuation of approximately $60 billion, implying that investors are factoring in a highly optimistic growth scenario.
Rothschild & Co Redburn has launched coverage on Oracle Corp. (ORCL) with a ‘Sell’ rating alongside a $175 price target, with the analyst citing concerns that the tech giant’s cloud revenue potential is being misjudged by investors, as per TheFly.
Oracle stock traded over 3% lower in Thursday’s premarket. On Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory amid ‘high’ message volume levels.
The stock experienced a significant 2,261% increase in user message count over the past month. A bullish Stocktwits user said the price drop is a ‘once in a lifetime opportunity’.
Analyst Alex Haissl argues that the market "materially overestimates" the worth of Oracle’s cloud contracts, particularly in single-tenant setups where Oracle acts more like a lender than a traditional cloud vendor, "with economics far removed from the model investors prize”.
Haissl pointed out that Oracle’s projections for cloud revenue over the next five years suggest a total valuation of approximately $60 billion. In his view, this implies investors are factoring in a highly optimistic growth scenario, one that may not play out as expected.
On September 10, outgoing CEO Safra Catz said the company had signed four multi-billion-dollar contracts in the first quarter and expects to book cloud orders exceeding half a trillion dollars.
The tech giant expects second-quarter (Q2) revenue growth of 14% to 16%, and cloud revenue growth of 33% to 37%. It anticipates Q2 earnings per share (EPS) in the $1.61 to $1.65 range, compared to analyst expectations of $1.48, according to Fiscal AI data.
Oracle stock has gained over 85% in 2025.
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