Oracle's strong performance surpasses Dow Jones, driven by cloud expansion and AI demand; stock up 34% YTD.

The Austin-based technology company Oracle Corporation (ORCL), which specializes in cloud solutions and database management, has significantly outperformed the Dow Jones Industrial Average ($DOWI) in recent months. While the Dow has gained by 9.1% during the last three months, Oracle's stock has increased by 20.7%.

Oracle’s shares are up 17.1% over the last year and 34% so far this year, while being 3.6% behind their 52-week high of $146.59, which was hit on July 15. By comparison, the Dow has increased by 19.3% in the last year and by 10.3% in 2024.

The strength of Oracle's cloud business, which has profited from the move to cloud-based infrastructure and the increased demand for artificial intelligence (AI) solutions, is the foundation of its outstanding success. It has been estimated that the cloud services market would grow to $70 billion by the end of the decade, with a 26% annual growth rate. Oracle's cloud revenue grew 12% year-over-year to $39.4 billion for the fiscal year ending May 31.

Strong upward momentum is shown by the fact that Oracle's stock has been trading above both its 50-day and 200-day moving averages since late August and late April, respectively. There is a 5.9% potential upside for the stock, based on 29 analysts' average "Moderate Buy" recommendation and mean price target of $149.64.

Although outpacing Oracle in growth, rival Microsoft (MSFT) has gained 10.9% so far this year. With Oracle's consistent performance and strategic stance in the cloud and AI businesses, analysts are still upbeat about the company's future prospects.