Oracle Announces Game-Changing News for the AI Industry

Key Points

• Oracle produced a game-changing year in 2024, revealing its growing importance to AI.
• The latest news includes a critical role in The Stargate Project, a joint venture between OpenAI and Softbank.
• Analysts' sentiment is strengthening for this stock, cautiously pointing to a potential double-digit upside in 2025.

Oracle’s NYSE: ORCL game-changing news isn’t centered on a single event but rather a series that culminates in forming The Stargate Project. The Stargate Project is a new joint venture between OpenAI and Softbank intended to build next-gen AI-focused data centers in the United States. Oracle is among the critical technology partners and is central to the build. Its database services and increasing AI capability make it a perfect partner and cement it as a crucial player in the cloud, AI infrastructure, and now AI services. The AI services matter most; it is forecasted to be the largest and fastest-growing segment of AI, capable of sustaining Oracle’s business growth at a robust pace for the next decade at least. 

Other news includes the launch of Oracle’s AI agents. The AI agents are part of Oracle’s Fusion Cloud Customer Experience suite and are already available to customers. The tools include automation and generative capabilities that connect data across financial systems, supply chains, and cloud hyperscalers. Features include customizable email generation, advanced record keeping, and time-saving automation of manual tasks that leave sales teams more time to engage with customers. The takeaway is that Oracle is quickly becoming a critical AI services provider, which is evident in its recently acquired business. 

WE Fashion is one of Europe’s leading fashion retailers. It is an omnichannel business with operations in nearly three dozen countries. It is switching to Oracle’s cloud and will use the retail suite and warehouse management AI. The move includes completely redesigning business processes, improved security, and increased agility. Services include automation of best practices, inventory optimization, and consumer insight to improve operational quality and sales. 

Trump Backs the Stargate Project: Promises Expedited Approval

The analysts’ consensus forecasts reported by MarketBeat are likely too low because The Stargate Project will generate results this year. Not only is the first campus already chosen, but newly-inaugurated President Trump has promised to fast-track the approval processes, and additional campus sites will be found soon. 

Trump’s support assures a rapid advancement with reduced risks, which is significant because of the $500 billion price tag and impact on national security. The project will advance the U.S. AI capability while improving domestic infrastructure and creating jobs.

The analysts forecast only 8.5% growth in 2025 despite the robust performance of cloud and AI infrastructure segments in the first fiscal half and building momentum in the services segment. The critical details are that this company is growing, widening its margin, improving cash flow, and has a positive outlook for all to improve in 2025 and 2026. 

Cash flow is important because it allows this company to pay a reliable dividend and increase the distribution annually while reinvesting in its growth. The balance sheet highlights from the first half include higher-than-wanted debt levels offset by increased cash and assets, steady liability, and a significant increase in shareholder equity. 

Analysts Forecast New Highs for Oracle in 2025

Oracle’s analyst trends are positive, including increased coverage, firm sentiment, and a rising price target. The 30 tracked by MarketBeat rate the stock as Moderate Buy and lifted the consensus target by nearly 45% since early 2024. The consensus implies fair value near 2024’s highs, but revisions lead to the high range, which runs from $200 to $220, a 9% to 15% upside from the critical resistance point. 

The charts are promising. The price action confirms support at a critical moving average and aligns with an uptrend. The critical resistance point is near the all-time high and will likely be tested early in the year. A move above $198 will be a bullish signal and open the door to a larger movement. The technical outlook in that scenario is another $45 to $75 of upside, giving a target range of $245 to $275.