Oracle Corporation (ORCL) Stock: Why Top Investors Are Loading Up During the Dip

TLDR

Table of Contents

Oracle stock is down nearly 20% year-to-date in 2025
Recent Q3 2025 results: $14.13 billion revenue (6.4% YoY increase) with cloud revenue up 23% to $6.2 billion
Oracle increased quarterly dividend by 25% to $0.50 per share (1.51% yield)
Company has formed cloud partnerships with OpenAI, xAI, Meta, NVIDIA, and AMD
Top investor Gary Alexander recommends buying the dip, citing Oracle’s $130 billion sales backlog and projected 15% revenue growth

Oracle Corporation (ORCL) has faced a challenging start to 2025, with its stock declining nearly 20% year-to-date. The tech giant has been caught in broader market trends putting pressure on technology stocks, including tariff concerns and fears of a global economic slowdown.

The company’s fiscal 2025 third-quarter report, released in early March, added to investor concerns. Oracle posted revenues of $14.13 billion, marking 6.4% year-over-year growth but missing expectations by $259.18 million.

Its GAAP earnings per share of $1.02 also fell short of forecasts by $0.04. Despite these challenges, some market experts see the current dip as a buying opportunity rather than a reason for alarm.

Cloud Growth Accelerates

One bright spot in Oracle’s recent earnings was its cloud business performance. The cloud segment, which includes Infrastructure as a Service (IaaS) and Software as a Service (SaaS), generated $6.2 billion in revenue.

This represents a 23% year-over-year increase in US dollars. IaaS revenue alone surged by an impressive 49% to $2.7 billion.

Oracle has been strategically expanding its cloud partnerships with major tech companies. The firm has formed alliances with leading names like OpenAI, xAI, Meta, NVIDIA, and AMD.

These partnerships are part of Oracle’s strategy to strengthen its position in the growing artificial intelligence and cloud computing markets.

According to reports, GPU consumption for AI model training on Oracle’s platform has more than tripled over the past year.

Strong Financial Position and Dividend Growth

Oracle continues to demonstrate financial strength despite market headwinds. The company reported $20.7 billion in operating cash flow and $5.8 billion in free cash flow over the past 12 months.

It finished the quarter with a healthy $17.4 billion in cash and equivalents.

On March 10, Oracle announced a 25% increase to its quarterly dividend, raising it to $0.50 per share. This marks another positive sign for investors focused on income generation.

The company has consistently paid dividends since 2009, establishing itself as a reliable dividend stock with a current yield of 1.51% as of April 12.

This dividend increase comes at a time when dividend-paying stocks continue to attract investor interest due to their long-term value. Between 1960 and 2024, reinvesting dividends from index stocks would have turned a $10,000 investment into approximately $6.42 million by early 2025, compared to $982,000 from price appreciation alone.

Expert Outlook Remains Positive

Top investor Gary Alexander, who ranks in the top 3% of TipRanks’ stock professionals, maintains a bullish stance on Oracle despite its recent setbacks.

“Already one of the world’s most dominant software companies, the company has built up a massive deferred revenue backlog that is pre-empting a sharp acceleration in revenue next year,” states Alexander.

The 5-star investor points to Oracle’s exceptionally broad product offerings as a key advantage. The company’s portfolio extends well beyond database software to include a wide range of cloud applications covering sales, finance, and other business functions.

“In my view, the recent trends of greater IT budget scrutiny will make it tougher for smaller, single-app companies to land deals, and push more business toward large portfolios like Oracle,” adds Alexander.

Oracle boasts a substantial $130 billion sales backlog, which supports expectations of 15% total revenue growth in the upcoming fiscal year starting June.

Looking further ahead, the company has guided for even stronger performance, projecting 20% growth in Fiscal Year 2027.

Wall Street largely shares this optimistic outlook. Oracle currently holds a Moderate Buy consensus rating with 15 Buy and 13 Hold recommendations.

The 12-month average price target of $182.32 suggests a potential upside of approximately 35% from current levels.

For investors focused on dividend growth stocks, Oracle presents an interesting case. The company’s combination of established market position, cloud growth momentum, and commitment to returning capital to shareholders makes it worth considering despite recent volatility.

As Alexander advises: “Stay long here and use this year’s dip as a buying opportunity.”

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