Options markets imply an 11%, or nearly $18, post-earnings swing in Oracle shares, with calls trading “a lot richer than puts.”
- Analysts expect revenue to rise 27% from the previous year to $19.14 billion and adjusted EPS to increase nearly 18% to $1.74.
- Mizuho expects Oracle Cloud Infrastructure outperformance as nearly 1 gigawatt of capacity comes online.
- Analyst targets range from Oppenheimer’s $275 to Guggenheim’s $400, implying about 70% to 147% upside from current levels.
Shares of Oracle Corp. (ORCL) slipped 1% in early premarket trading on Thursday as bullish options activity and upbeat Wall Street forecasts fueled expectations that surging demand from OpenAI and other AI customers could help the database giant deliver another cloud-driven earnings beat.
ORCL stock snapped four straight sessions of gains on Wednesday to end the session about 1% lower.
ORCL Traders Bet On Earnings Upside
Oracle will report first-quarter (Q1) results after the closing bell on Thursday. Options are pricing in an 11% move, or nearly $18 per share, around earnings, according to IG Group North America research head Julia Spina. “Calls are trading a lot richer than puts,” Spina said, meaning traders are paying more for upside exposure than downside protection — “kind of the opposite of what you normally see in equities markets.”
The activity has intensified over the past two weeks as investors potentially try to avoid missing another rally. Oracle surged about 36% following its September earnings report last year after delivering a major upside surprise.
According to Fiscal AI, analysts expect revenue of $19.14 billion, up 27% from a year earlier. Adjusted earnings per share (EPS) is projected to rise nearly 18% to $1.74, while earnings before interest, taxes, depreciation, and amortization (EBITDA) is expected to jump about 41% to $10.58 billion. Sequentially, however, Koyfin estimates show revenue slipping 0.3%, EBITDA falling 3.1% and adjusted EPS declining 17.6%.
OpenAI Demand Fuels Oracle Cloud Growth
Mizuho reiterated an ‘Outperform’ rating and $320 target, implying about 98% upside from current levels. The firm expects oracle cloud infrastructure (OCI) outperformance as Oracle brings nearly 1 gigawatt of capacity online during the quarter, compared with 1.2 gigawatts during all of fiscal 2026.
The expansion could help Oracle convert its enormous AI backlog — much of it linked to OpenAI and Project Jupiter — into revenue. Mizuho also said investors underappreciate the company’s “bring-your-own-hyperscaler” and prepaid structures, which reduce its balance-sheet burden.
Oppenheimer also maintained an ‘Outperform’ rating and $275 target, representing about 70% upside. Its analysis points to stronger OCI growth and backlog conversion, supporting the bull case that cloud demand is constrained by supply rather than customers.
Oracle has guided for Cloud Services revenue growth of 57% to 63% in constant currency. However, Guggenheim estimates that meeting the forecast would require just over $9 billion of new infrastructure-as-a-service annual recurring revenue to come online, more than double the estimated $4.2 billion added in the previous quarter.
Oracle’s AI Funding Risk Looms
Guggenheim retained a ‘Buy’ rating and $400 target, implying a 147% upside. The firm said Oracle’s $20 billion at-the-market equity offering has become a bigger investor concern than its concentration of business with OpenAI.
Oracle plans to raise $40 billion in fiscal 2027 for its AI buildout. Guggenheim said conversations with rating agencies suggest equity will likely need to fund part of the remaining amount, although it believes Oracle has passed the riskiest stage of the expansion.
The company’s five-year credit-default swaps recently hit record highs, underscoring concern about its capital commitments. Oppenheimer warned that higher capex guidance or capacity delays could pressure the stock, while Mizuho sees room for a re-rating if financing concerns ease and free-cash-flow visibility improves.
How Do Retail Traders Feel About ORCL?
On Stocktwits, retail sentiment for ORCL slipped to ‘bullish’ from ‘extremely bullish’ levels a day ago amid ‘high’ message volume.
One user said, “$ORCL tomorrow will be fall another 5% before bell and after bell straight to $200- $210”
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Another user said, “$ORCL holding 420 through earnings and into next year. No reason we should be priced this low compared to Dell”
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ORCL stock has declined 32% over the past year.
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