Oracle stock is in a weird spot. Sales and earnings growth are exploding, but that hasn't stopped shares from plummeting in recent months.

Enough is enough for Citi analyst Tyler Radke: He put a "positive catalyst watch" on Oracle shares Thursday. That means he sees the stock rising soon, for several reasons, and a chance for investors to jump in.

"We see opportunity after one of the most extreme dislocations and drawdowns in the stock's history, driven by investor capitulation and multiple technical selling factors," Radke wrote.

One of those factors is debt markets.Oracle, like many others, is spending more to capture artificial-intelligence market share, leading the company to issue debt and equity. That has made investors a little nervous: The cost to insure Oracle debt is now 2.9% of the face value, up from 1.9% earlier in the year.

Those rates aren't alarming, but there is a reason debt insurance costs are up. Oracle is expected to spend about $275 billion over its coming fiscal three years ending in May 2029-more than triple the $84 billion figure from the prior three fiscal years. That money is eating away at free cash flow. But Oracle is generating sales and earnings. Wall Street expects sales and earnings to increase by about 30% annually for the next five years. Oracle's growth rate was closer to 10% the previous five years.

For now, however, investors are squarely focused on the risks. Oracle stock trades for about 17 times earnings expected over the coming 12 months, down from 33 times a year ago and from a peak of about 50 times in September 2025.

Investors are overlooking a key point, however: AI sales and earnings are very strong, and that bodes well for Oracle. AI computing service providers provided strong second-quarter updates, Radke notes.

"The ongoing 'insatiable demand' backdrop is driving positive profitability revisions, with significant pricing and margin upside," wrote Radke. "We expect Oracle to see similar pricing/margin benefits on new [AI computing] contracts."

Even better sales and earnings growth than currently forecast are possible. Radke rates Oracle shares Buy and has a $330 price target. He isn't an outlier. Overall, 80% of analysts covering Oracle rate shares Buy. The average Buy-rating ratio for S&P 500 stocks typically ranges from about 55% to 60%. Radke's price target, however, is higher than the Wall Street average of about $250.

Radke's target price values Oracle at about 33 times estimated calendar year 2027 earnings. The average target values it for closer to 25 times. Neither multiple seems unreasonable if Oracle grows earnings 30% annually.

Oracle stock rose 1.2% Thursday to $150.68, while the Nasdaq Composite was up 1.1%. Radke's optimism might be helping, but Nvidia earnings are likely helping too. The chip giant reported better-than-expected earnings and indicated that calendar year 2027 sales should grow 70%. Wall Street was expecting growth closer to 45%.

The AI trade is alive and well-but that idea just isn't reflected in Oracle's current stock price. Coming into Thursday trading, Oracle stock was off 24% year to date and down 37% over the past 12 months.