Oracle Stock Skyrockets as Guggenheim Analyst Forecasts a Future ‘Free Cash Flow Waterfall in Fiscal 29 and 30’

Oracle stock ORCL +9.18% ▲ is currently becoming the talk of Wall Street after the company reported its strongest financial results in over 15 years. Despite a recent pullback in the broader tech sector, Guggenheim analyst John DiFucci is standing firm with a massive $400 price target for the software giant. DiFucci, who has named Oracle his “Best Idea” for 2026, believes the company’s massive investments in AI data centers will eventually pay off in a huge way. He boldly predicted a sharp turn in the company’s financial health, stating, “Free cash flow, this thing turns into a free cash flow waterfall in Fiscal 29 and 30.” The news sent ORCL shares up 9.2% at market close yesterday.

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Guggenheim Analyst Defends the “Decade Stock”

While some investors worry about the high cost of building AI infrastructure, Guggenheim sees these expenses as the foundation for future riches. DiFucci describes Oracle as a “decade stock” that is just beginning its most explosive growth phase. Even though the company’s current free cash flow is temporarily negative due to record-breaking spending, the analyst argues that the numbers will soon be impossible to ignore. He wrote, “While we keep calling this a decade stock (because we believe it is), we expect the numbers to be irrefutable in half that time and be obvious long before that.”

Oracle Breaks a 15-Year Record

The latest earnings report proves that Oracle is moving at a speed the market hasn’t seen in over a decade. For the first time in 15 years, both organic revenue and earnings grew by more than 20% at the same time. The company’s AI infrastructure revenue jumped by a staggering 243% compared to last year. Management also revealed that they have built up a massive backlog of future business, with Remaining Performance Obligations (RPO) hitting a record $553 billion. This means Oracle has already sold most of the capacity it is currently building.

The “Bring Your Own Chip” Model Changes the Game

One of the most interesting parts of Oracle’s strategy is its new “bring-your-own-chip” (BYOC) approach. This model allows big customers like OpenAI to provide their own hardware while Oracle provides the data center space and power. Guggenheim believes this shift could lower Oracle’s out-of-pocket costs by as much as $100 billion. DiFucci pointed out that this plan validates Oracle’s tech as a primary utility for the AI economy, writing, “The BYOC option makes it more evident that customers are not simply renting GPU use in the case of Oracle.”

The Market Faces a Massive Supply Squeeze

Right now, the demand for Oracle’s cloud services is far higher than what the company can actually provide. In the last quarter alone, Oracle delivered more than 400 megawatts of power to its customers, and 90% of that was finished on or ahead of schedule. With over 2,000 new customers going live on its systems recently, the company is racing to keep up. If Guggenheim is correct and the current spending leads to a “waterfall” of cash in a few years, the current stock price could be seen as a rare opportunity for patient investors.

Is ORCL Stock a Good Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on ORCL stock based on 28 Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average 12-month ORCL price target of $256.23 per share implies 57% upside potential.

See more ORCL analyst ratings

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