Will an AI Software Trend Deliver Oracle Stock Price Boost?

With software being considered by many to be the next phase of growth in the AI sector, could Oracle's stock (NYSE:ORCL) be one of those to emerge from the pack?

The ORCL stock price has quietly gained 64.98% year-to-date, delivering a 2-to-1 outperformance on the broader market. The company continues to attract investors as a top choice in the enterprise software market, with the efficiencies found in AI thought to amplify performance in the year ahead. The company's robust performance, particularly in cloud services, makes it a strong contender for those looking to invest in this burgeoning sector.

The global enterprise software market is valued at $263.79 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 12.1% from 2025 to 2030. This market growth is supported by a significant share held by North America, which accounted for 41% of the industry in 2024. Cloud-based software solutions are expected to dominate, comprising over 55% of the market this year.

Oracle's strong performance is underscored by its cloud services and license support, which generated $10.8 billion in revenue during the second quarter of fiscal year 2025. This segment showed a 12% increase year-over-year, contributing 77% to Oracle's total revenue for the quarter. Oracle Cloud Infrastructure (OCI) is a key driver in this growth, largely due to increasing demand for AI workloads.

A recent partnership with Amazon has further bolstered investor confidence in Oracle. This collaboration is expected to enhance Oracle's competitive edge, alongside its flexible deployment options and competitive pricing in cloud services. As a result, Oracle ranks fourth among the best enterprise software stocks to invest in.

However, investors are advised to consider rebalancing their portfolios to mitigate risks associated with high concentration in mega-cap tech stocks, while still capitalizing on the growth potential within the software sector.

Oracle's strategic positioning in the enterprise software market and its focus on cloud services make it a compelling option for investors looking at enterprise software stocks. The Oracle stock price has pulled back ~10% from recent 52 week highs, giving a potentially decent looking entry with the new year approaching. Holding a consensus price target of $196.55, there remains plenty of potential upside in the eyes of the analyst community, and this could help drive sentiment somewhat.

Whilst due diligence will need to be done before taking any position, the company's ongoing initiatives and partnerships signal a positive outlook for sustained growth and market relevance.