Technology giant Oracle Corporation (ORCL) reports second-quarter earnings Wednesday after the market closes, and there's a lot riding on the results. The company has become something of a bellwether for multiple hot sectors right now—big tech, AI infrastructure, and cloud computing—which means Wall Street will be watching closely.

The setup is interesting. Oracle shares have historically rallied after earnings, climbing after five of the last seven reports with an average gain of 17%. But things haven't been smooth sailing lately. Shares are down more than 46% from their September 10 peak, even after a 36% surge following last quarter's report.

What The Street Expects

Analysts are looking for second-quarter revenue of $16.22 billion, up from $14.06 billion in the same period last year, according to data from Benzinga Pro. On the bottom line, expectations sit at $1.64 per share, compared to $1.47 a year ago.

Oracle's recent track record with estimates has been spotty. The company has missed revenue forecasts in seven of the last ten quarters. On earnings per share, the pattern is mixed—three misses in the last four quarters, though seven beats in the last ten overall.

The Analyst Take: Due For A Bounce?

JPMorgan analyst Mark Murphy thinks Oracle stock could be "due for a bounce," maintaining a Neutral rating with a $270 price target. The key issue, according to Murphy, is Oracle's historic backlog—impressive on paper, but the company needs to prove it can actually execute on those commitments.

"In our view, sentiment has tended to swing too far and too fast in both directions without allowing for a reasonable assessment of middle-ground outcomes," Murphy noted in a recent investor update.

Murphy said Oracle needs to deliver on a few fronts to restore investor confidence. First, showing an expanded list of AI customers would help. Second, the company needs to provide clearer commentary on capital spending requirements over the next several years. And third—this is the big one—investors want more details about that mysterious $300 billion contract with an unnamed customer.

"In our view, a 'clean in-line' quarter on revenue and cloud growth, coupled with clearer disclosure around RPO quality and contract durability, would likely be sufficient for the stock in the near term," the analyst said.

The Debt Worry That Won't Go Away

Freedom Capital Markets Chief Market Strategist Jay Woods highlights a concern that's been weighing on the stock: Oracle's aggressive AI infrastructure buildout—particularly for OpenAI—appears to be funded by mounting debt rather than operating profits.

"May investors fear that Oracle's aggressive push into AI-cloud infrastructure – especially its build-out for OpenAI – is being funded by mounting debt, not by operating profits," Woods wrote in a weekly newsletter.

Woods noted that Oracle recently added billions in debt, which has investors worried the AI bets might not deliver expected returns. "Shares have retreated and have become a focal point for those looking at AI growth," he added.

Wall Street's Latest Ratings

Here's where major analysts stand on Oracle heading into the report:

• Barclays: Maintained Overweight rating, lowered price target from $400 to $330
• Citigroup: Maintained Buy rating, lowered price target from $415 to $375
• Deutsche Bank: Reiterated Buy rating, with price target of $375
• DA Davidson: Maintained Neutral rating, lowered price target from $300 to $200
• Baird: Maintained Outperform rating, lowered price target from $365 to $315

What To Watch Wednesday

Oracle actually beat the post-earnings pattern last quarter—shares initially traded higher after a revenue and earnings miss, thanks to strong guidance. But the gains didn't stick, and the subsequent selloff has put extra pressure on Wednesday's results.

Beyond the OpenAI relationship concerns, Oracle faces another potential headwind: Gemini has emerged as a bigger competitive threat to OpenAI in recent weeks, which could limit the upside of being so closely aligned with ChatGPT's parent company.

The guidance Oracle provided last quarter was ambitious, to say the least. The company expects Cloud Infrastructure revenue to grow 77% to $18 billion in the current fiscal year. Looking further out, the segment is projected to reach $32 billion, $73 billion, $114 billion and $144 billion over the next four fiscal years, respectively.

Those are massive numbers, which is why investors are hungry for more specifics about how Oracle plans to achieve them and which partners will help drive that growth. More transparency on those points could go a long way toward stabilizing the stock.

Oracle shares closed Tuesday down 0.2% at $220.16, trading within a 52-week range of $118.86 to $345.72. Despite the recent pullback, the stock is still up 32.6% year-to-date in 2025.