Shares of enterprise computing, cloud, and data management pathbreaker Oracle Corp. (NYSE: ORCL) climbed by an astonishing two-thirds in the last year, repeatedly setting record highs (and making co-founder Larry Ellison the second-wealthiest person in the world in the process). As analysts from Jefferies, D.A. Davidson, Bernstein, and elsewhere raised their price targets for ORCL shares recently, it appears the company's upward momentum may continue.
Indeed, Oracle has many things working in its favor, including a successful cloud database offering, massive AI infrastructure improvements, flagship cloud services agreements, and key strategic partnerships. However, investors considering a new or larger position in ORCL should be cautious, as the market may have overestimated the company's growth potential, especially after shares have already risen by 67% in the past 12 months. Further, concerns about upcoming capital needs and margin hits after federal government discounts might be a cause for hesitation.
