CNBC Daily Open: Investors Remain Optimistic Despite Fed's Hawkish Rate Cut
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 11 2025
0mins
Should l Buy ORCL?
Source: CNBC
Federal Reserve Rate Cut: The U.S. Federal Reserve cut interest rates by a quarter percentage point, bringing the target range to 3.5%-3.75%, despite some members advocating for rates to remain unchanged. The Fed's projections indicate minimal future cuts, with only one expected in 2026 and another in 2027.
Market Reaction: U.S. markets rose following the Fed's announcement, particularly due to the unexpected decision to purchase $40 billion in Treasury bills, which is seen as a way to ease financial conditions and support market growth.
Economic Outlook: Fed Chair Jerome Powell expressed confidence in the resilience of the U.S. economy, raising the growth forecast for 2026 from 1.8% to 2.3%, suggesting a positive outlook for the remainder of the year.
Trump's Criticism of Europe: President Trump criticized European leaders as "weak" regarding their response to the war in Ukraine, highlighting tensions as Europe seeks to support Ukraine while feeling sidelined in peace negotiations involving the U.S. and Russia.
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Analyst Views on ORCL
Wall Street analysts forecast ORCL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ORCL is 309.59 USD with a low forecast of 180.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
25 Buy
9 Hold
0 Sell
Moderate Buy
Current: 136.480
Low
180.00
Averages
309.59
High
400.00
Current: 136.480
Low
180.00
Averages
309.59
High
400.00
About ORCL
Oracle Corporation offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. The Company operates through three businesses: cloud and license, hardware and service. Its cloud and license business is engaged in the sale, marketing and delivery of its enterprise applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings, and its cloud license and on-premise license offerings. Its hardware business provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments. Its services business provides services to customers and partners to help maximize the performance of their investments in Oracle applications and infrastructure technologies.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Reaction: Following the election results, Japanese stocks reached a record high, with the yen strengthening to 156.88 per dollar, reflecting renewed investor confidence in the government's future policies and economic direction.
- International Market Trends: U.S. markets also showed strong performance post-election, with major index futures rising, indicating global investor interest in tech stocks, particularly in the AI sector, further contributing to the overall market recovery.
See More
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See More
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- Microsoft's Investment Appeal: Microsoft reported a 66% year-over-year increase in capital expenditures in Q2 2026, and despite a slowdown in Azure's growth, its remaining performance obligation surged 110% to $625 billion, making it attractive for long-term investors with a current P/E ratio of 26, below S&P 500 and Nasdaq-100 averages.
- Oracle's Upside Potential: Oracle's stock is viewed by analysts as having higher upside potential, with a median price target of around $272, indicating an 88% upside over the next 12 months; however, concerns over its AI spending persist, despite a 438% year-over-year increase in its contract backlog to $523 billion, indicating strong market demand.
- Market Focus on AI Spending: Investors are wary of Oracle's AI expenditures, especially after its announcement to raise $50 billion for new data centers, and while its client list includes industry giants like Nvidia and Meta, concerns about OpenAI's funding capabilities may impact its stock performance.
See More
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- Large-Cap Tech Underperformance: As of February 4, 2026, large-cap tech stocks have declined approximately 3%, making them the worst-performing sector, reflecting investor concerns over high valuations and excessive AI spending, which may increase the risk of a market correction.
- Microsoft's Investment Appeal: Microsoft reported a 66% year-over-year increase in capital expenditures in Q2 2026, and despite a slowdown in growth for its AI cloud engine Azure, its remaining performance obligation rose 110% to $625 billion, making it attractive for long-term investors with a current P/E ratio of 26, below the S&P 500 and Nasdaq-100 averages.
- Oracle's Potential Upside: Oracle's stock is rated by Wall Street analysts to have an 88% upside potential with a target price of around $272, despite investor concerns over its AI spending; its contract backlog surged 438% year-over-year to $523 billion, indicating strong demand for cloud computing.
- Caution on AI Spending: Investors are cautious about companies with high AI expenditures, particularly Oracle due to its $300 billion contract with OpenAI, which has raised concerns despite its increasing debt, yet it remains attractive from a valuation perspective.
See More
Market Dynamics Analysis of Nvidia and Oracle
- Nvidia Market Performance: Nvidia's stock has surged over 700% in the past three years, pushing its market capitalization beyond $4 trillion, making it the highest-valued company globally, which underscores its dominant position in high-performance AI applications and attracts significant investor interest.
- Oracle Financial Challenges: Oracle's stock has plummeted over 52% since September, with a market cap of only $440 billion, primarily due to its substantial spending on AI infrastructure and over $100 billion in debt, raising investor concerns about its financial health.
- Revenue Growth Potential: Despite debt pressures, Oracle reported a 14% year-over-year revenue increase in Q2 FY2026 to $16.05 billion, with net income soaring 95% to $6.13 billion, indicating strong growth potential in its cloud computing and software services sectors.
- Future Outlook and Valuation: Oracle's forward price-to-earnings ratio stands at just 19.8, the lowest in over two years, and while analysts are optimistic about its future revenue projections, the company did not make the current list of top investment stocks, reflecting a cautious market sentiment regarding its potential.
See More
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- Nvidia's Market Performance: Nvidia's stock has surged over 700% in the past three years, pushing its market capitalization above $4 trillion, making it the largest company globally, reflecting its dominance in high-performance AI applications.
- Oracle's Market Challenges: Oracle, with a market cap of $440 billion, has seen its stock drop over 52% since last September, primarily due to high spending on AI infrastructure and a debt load exceeding $100 billion.
- Financial Performance Highlights: Oracle's recent Q2 FY2026 earnings report revealed a 14% year-over-year revenue increase to $16.05 billion, with net income soaring 95% to $6.13 billion, although this includes a $2.7 billion pre-tax gain from the sale of Ampere Computing.
- Future Growth Potential: Oracle's cloud revenue reached $7.977 billion, a 34% increase year-over-year, and future revenue is expected to rise significantly, with a forward price-to-earnings ratio of 19.8, indicating the stock's attractiveness.
See More
