Wolfe Research’s Alex Zukin suggests buying Oracle Corp. (NYSE: ORCL), on its post-earnings dip, as the company is the fourth hyperscaler to support new AI workloads.
Oracle’s fiscal second-quarter results came in slightly lower than Street expectations last night.
The investment company still sees its value in the sale of shares, as they are well positioned to assist companies that want to “make the transition to the cloud” for the first.
Oracle’s stock has risen 75% since the beginning of 2025, despite today’s market action.
Oracle Stock is set to Benefit from AI Tailwinds
Wolfe Research is confident that Oracle can accelerate its growth because it “has a wealth of experience in commercial engagements, and has a broad breadth and depth of products and services”.
Analyst Alex Zukin said in an interview on Yahoo Finance that the company was well positioned to capitalize on AI tailwinds because it had the chips, and also the correct architecture.
Oracle signed a contract with Nvidia, Larry Ellison and its co-founder. Elon Musk is slated to become Donald Trump’s advisor.
Zukin said that this shows how “well connected” they are both globally and in the US.
Oracle’s stock pays out a current dividend yield of 0.84 percent, which is another reason why you should have it in the portfolio.
ORCL doesn’t worry about RPO weaknesses
Oracle announced a decline of $97 billion in the remaining performance obligation (RPO), from $99 billion.
RPO provides a look ahead indicator of contracts that a business has yet to complete and recognize as revenue.
Wolfe Research analyst Alex Zukin dismissed that as well. He said “that number is going up unbelievably fast… It ticked by $30 billion from Q2 last year to Q4 last year.”
Oracle’s performance obligations remained up by 50% on an annual basis in constant currencies. ORCL’s shares have tripled in value since the pandemic.
Oracle’s cloud infrastructure growth beats hyperscale rivals
Alex Zukin is still bullish about Oracle’s stock, as the Cloud Infrastructure Revenue for its second quarter was up by 52%. This indicates a solid AI demand which CEO Safra Katz also highlighted in a Monday press release.
She added that the growth rate was higher than “any hyperscale cloud competitors.”
Oracle has already partnered with Amazon, Microsoft Google and Meta Platforms. Zukin believes that such strategic alliances will allow ORCL to continue to rise in the stock price by 2025.
He concluded that “they only have to continue doing what they are doing, and the stock is going to continue working.” Wolf Research has set a price target of $205 on Oracle, which translates into a 15% increase from the current level.
Crispus Nyaga, our analyst, talked about a possible retreat of Oracle’s stock before its bull-run resumes in October.
The post Why Oracle’s earnings were not so bad: a deeper dive may be updated as new information becomes available.
