Is Oracle's AI Rally Over? Wall Street Thinks ORCL Could Hit $400

Oracle Corp (NYSE: ORCL) has been one of the standout tech stories of 2025. Its 42% single-day surge in early September, after a strong earnings report and the announcement of its $300 billion cloud partnership with OpenAI, represented the company’s most notable move in a long time.

While the stock had been moving well throughout the summer beforehand, the update instantly redefined how investors see Oracle’s place in the broader artificial intelligence (AI) ecosystem and sent the stock to record highs. 

Since then, shares have given back about 20% of those gains as investors take some profit amid rising valuation concerns. However, the broader trend remains firmly bullish, with the stock still up more than 130% since April. That said, the pressure is now on management to keep delivering. With its price-to-earnings (P/E) ratio already at its highest in decades, Oracle has to prove that it can justify such a premium. 

The good news is that for investors wondering if all the near-term upside has already been captured, recent updates suggest Oracle’s multi-month rally might only be getting started. Let’s jump in and take a closer look. 

The Rally That Redefined Oracle

It’s looking increasingly like the September breakout marked a fundamental shift in Oracle’s identity, from that of a legacy enterprise software company to a genuine AI infrastructure contender. The OpenAI contract has positioned Oracle as a key supplier to the world’s hottest AI stocks, sparking a wave of optimism unlikely to subside anytime soon.

Even after retracing part of that rally in recent weeks, Oracle remains up more than 130% since April, a testament to the depth of investor conviction. The correction has also helpfully cooled the stock’s technicals, pulling its Relative Strength Index back from extremely overbought territory to more neutral levels and giving bulls fresh room to maneuver.

Shares also appear to be finding recurring support around the $275 mark, where buyers have stepped in throughout October. 

Analysts Are Lining Up Behind the Bull Case

For those investors who might be worried about the selloff gaining momentum, bear in mind that Wall Street’s conviction has only strengthened in recent weeks. JMP Securities and Scotiabank have reaffirmed their Buy or equivalent ratings in the past week alone, with price targets of $342 and $360, respectively. 

These echo even more bullish stances from the teams at Barclays and Jefferies, who’ve recently given Oracle a price target of $400. From the $275 that Oracle closed out Tuesday’s session on, that’s pointing to an attractive upside target of 45%—not bad for a $785 billion company. 

It’s worth noting that even with the stock now trading near 65x earnings, Oracle’s valuation still trails that of many other AI stocks, such as Advanced Micro Devices Inc. (NASDAQ: AMD), which carries a P/E ratio of 137. The difference is that Oracle’s growth story is only beginning to unfold, while many of its peers are already well into their AI adoption cycles. This is one of the reasons that makes the current argument for getting involved so attractive. 

Why the Bears Might Be Wrong

That being said, some will argue the stock’s valuation has run too far, and already this week, the Goldman Sachs team has reiterated its neutral rating on the stock. There's also the risk that Oracle’s success will be heavily dependent on OpenAI’s success, while the company will face massive capital demands to scale its data center operations.

While they’re valid concerns, they overlook the strength of Oracle’s financial position. The company generates solid cash flow from its traditional software businesses, allowing it to fund expansion without over-leveraging. Its multi-billion-dollar backlog offers multi-year visibility, while its disciplined cost control has kept profitability intact even as it has ramped up investment in cloud infrastructure.

Investors remain firmly in risk-on mode when it comes to tech stocks, and as long as that’s the case, it’s hard to bet against a stock in Oracle’s position. If the company keeps executing and markets stay risk-on, a run toward $400 looks increasingly likely.

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The article "Is Oracle’s AI Rally Over? Wall Street Thinks ORCL Could Hit $400" first appeared on MarketBeat.