Oracle Corporation (NYSE: ORCL) has seen its stock increase by 43% year-to-date as of 2023, significantly outperforming the S&P 500’s 7% gain. This surge is largely fueled by the growing demand for Oracle’s cloud services, especially its Cloud Infrastructure (OCI) and Cloud Application (SaaS) revenues, which have increased by 35%, from $42 billion in 2022 to $57 billion recently. The company’s price-to-sales (P/S) ratio also rose by 127% from 5.7x in 2022 to 11.8x currently.
In fiscal year 2025, Oracle’s Cloud Services and License Support revenues reached $44 billion, up from $30 billion in 2022, with cloud services income more than doubling from $10.8 billion in 2022 to $24.5 billion. Additionally, total remaining performance obligations (RPO) increased 41% to $138 billion, offering robust future revenue visibility. Despite strong prospects, Oracle’s stock is currently valued at approximately $235, with a P/S multiple significantly above its four-year average of 6.5x.
Despite a positive outlook for growth driven by AI and cloud demand, risks remain, including past stock volatility and increasing capital expenditures that soared from $4.5 billion in 2022 to over $21 billion in 2025, raising concerns about the effectiveness of these investments.
