By Nate Wolf

Investors who flooded into Oracle stock just a couple of months ago may be kicking themselves these days. It isn't time to bail out, analysts say.

Shares surged 36% on Sept. 10, when the company said that its backlog of contracted work had more than tripled to $455 billion in its fiscal first quarter from the quarter before. The figure indicated robust demand for renting artificial-intelligence servers in the cloud.

But Oracle stock has plummeted nearly 30% since then, weighed down by worries about weaker-than-expected margins, complex financing arrangements, and more. Most of those losses have come in the past month: Including a move lower early Wednesday, shares have declined in 14 of the past 19 trading sessions.

If anything, that weakness is a reason to buy the stock ahead of the company's second-quarter financial results in December, said Mizuho Securities analyst Siti Panigrahi in a research note Tuesday. "We believe Oracle is well-positioned to exceed expectations," Panigrahi wrote.

CoreWeave, a rival in cloud-based AI computing, dropped sharply Tuesday after saying a data-center developer it was working with was behind schedule because of supply-chain problems, bringing Oracle stock down 1.9% with it. But CoreWeave's quarterly report had other nuggets Oracle shareholders will appreciate, Mizuho said.

The results showed strong AI demand, supporting the case for Oracle to build up the backlog of work it has under contract as AI training and usage ramps up. While CoreWeave's data-center delay may weigh on its results next quarter, Oracle has assured investors that its own buildout in Abilene, Texas, remains on track.

CoreWeave also addressed the concern that its clusters of graphics processing units, or GPUs, may not be flexible enough to meet different customers' needs, emphasizing that the chips can be reallocated as required.

"This aligns with Oracle's view that high-density GPU capacity can be flexibly repurposed as workloads evolve, reducing customer concentration risk and mitigating concerns over stranded capacity," Panigrahi said.

Mizuho reiterated an Outperform rating and a $400 price target for Oracle stock. That would represent a rise of more than 70% from Wednesday's share price of $232.01.

Mizuho's target is on the high end, but most analysts on Wall Street agree. Of the 46 firms polled by FactSet, 32 rate Oracle at Buy or the equivalent, and just two rate it Sell. But if shares are to break out of their recent slump, the company will need to prove it can meet AI demand and turn it into profit.

"Visibility remains limited regarding the future CAPEX trajectory and financing strategy," wrote analysts at Phillip Securities Research in a note last month. "Potential upside hinges on clearer visibility and faster execution of multi-billion-dollar AI deals."

The firm has a Buy rating for the stock and a $350 price target.

Write to Nate Wolf at nate.wolf@barrons.com

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November 12, 2025 11:16 ET (16:16 GMT)

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