Where Will Oracle Stock Be in 1 Year?

Core Viewpoint - Oracle's AI business is experiencing significant growth, positioning the company for potential market-beating returns despite recent underperformance compared to the broader market [1] Financial Performance - Oracle's fiscal Q4 revenue increased by 4% year over year in constant currency to $14.3 billion, while fiscal 2024 revenue rose by 6% to $53 billion [2] - Non-GAAP earnings for the quarter were $1.63 per share, slightly missing Wall Street's expectation of $1.65 per share [2] - The stock surged over 11% in premarket trading due to a 44% year-over-year increase in remaining performance obligations (RPO) to $98 billion, surpassing Wall Street's forecast of $73.9 billion [2][3] AI Demand and Clientele - Oracle signed 30 AI-related contracts worth over $12 billion in the previous quarter, totaling $17 billion in AI contracts for the full year [3] - Notable clients using Oracle's cloud infrastructure for AI include OpenAI, Nvidia, Google, Microsoft, and xAI, contributing to a 42% year-over-year increase in cloud infrastructure-as-a-service (IaaS) revenue to $2 billion [4] Future Growth Projections - Management forecasts continued strong cloud demand, expecting double-digit revenue growth in fiscal 2025, with cloud infrastructure services revenue anticipated to grow faster than the previous year's 50% [4] - A 10% increase in Oracle's top line this year could elevate annual revenue to $58.3 billion, exceeding analysts' expectations of $57.7 billion [5] Valuation and Investment Potential - Oracle shares are currently trading at 6.7 times sales, below the U.S. technology sector average of 7.6 [6] - If Oracle achieves $58.3 billion in revenue and maintains its current valuation, its market cap could rise to $391 billion, representing a 15% increase [6] - The substantial RPO indicates potential for stronger growth, suggesting that Oracle may provide healthier returns for investors in the coming year [6]