Oracle (ORCL -0.30%) chairman and chief technology officer Larry Ellison believes the software giant can gain share in the booming cloud market. Judging by the 15% jump in Oracle's stock price today, investors seem to agree.
Yet analysts are divided on its prospects. Some say its stock is a buy, while others are taking a wait-and-see approach.
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Cowen analyst J. Derrick Wood reiterated his outperform rating on Oracle's shares following the tech titan's impressive fiscal 2022 second-quarter report. He expects Oracle to win over skeptics as its cloud growth accelerates. In turn, Wood sees its stock price rising roughly 12% to $115.
BMO Capital analyst Keith Bachman also placed a $115 price target on Oracle's shares. Yet he has only a market perform rating on its stock. Although Oracle's 6% revenue growth in the second quarter was the highest increase in years, he's concerned that the previously sluggish grower may not be able to maintain its recently heightened pace of expansion.
Meanwhile, Citigroup analyst Tyler Radke voiced some concerns regarding Oracle's premium stock valuation. Though it delivered sales and profits that exceeded Wall Street's expectations in the second quarter, Radke warned that Oracle will face more difficult sequential and year-over-year comparisons in the coming quarters. Thus, he thinks Oracle's share price could fall approximately 3% to $100.
So, is Oracle's stock a buy?
Oracle's future stock price performance will largely be determined by whether it can successfully compete with cloud infrastructure leader Amazon.com (AMZN 1.49%).
For his part, Ellison has little doubt that it can. After Amazon Web Services (AWS) suffered an embarrassing outage earlier this week, Ellison said he began hearing from customers that appreciated the reliability of Oracle's cloud services.
If more businesses begin viewing Oracle's cloud operations as more dependable than that of AWS, Oracle could gain market share from its larger rival. And that would likely make its stock an attractive buy.
Yet make no mistake -- Oracle's battle against AWS will not be easy, as Amazon is a notoriously fierce competitor.
