From Yahoo Finance: 2025-03-30 10:15:00

Oracle (NYSE: ORCL) stock has outperformed the S&P 500 and Nasdaq Composite over the last three years, with a total return of 97%. The company benefits from the growing demand for AI services and operates a major network of cloud data centers.

In its fiscal 2025 third quarter, Oracle’s revenue increased by 6% year-over-year to $14.1 billion, with cloud services revenue jumping by 23% to $6.2 billion. The company has signed sales contracts with major players like Meta Platforms, Nvidia, and AMD, driving further revenue expansion.

While Oracle is positioned to benefit from skyrocketing AI demand, there are risks such as heavy spending on data center expansion impacting free cash flow. Any slowdown in AI spending could decelerate Oracle’s growth, given its 6% annual revenue growth rate.

Despite the risks, Oracle’s stock valuation is attractive, with a trailing 12-month P/E ratio of 36, slightly above its three-year average of 34. For investors interested in AI data center demand growth, Oracle could be a compelling long-term investment opportunity.

In a rare opportunity, The Motley Fool’s expert team is issuing “Double Down” stock recommendations for companies with high growth potential. Past recommendations like Nvidia, Apple, and Netflix have seen substantial returns, making this a unique chance for investors to capitalize on emerging opportunities.

Read more: Is Oracle Stock a Buy Now?