04:12 PM EDT, 10/17/2025 (MT Newswires) -- Oracle's (ORCL) long-term outlook may have disappointed some investors, but there are reasons to own the cloud computing company's stock, UBS Securities said in a Friday note.

Shares of Oracle declined 6.9% on Friday after the company said on Thursday it was aiming for earnings of $21 per share by fiscal 2030 and $225 billion in revenue, representing five-year compound annual growth rates of 28% and more than 31%, respectively.

The company anticipates signing "more large scale opportunities" over the next 12 months, Principal Financial Officer Doug Kehring said during a meeting with financial analysts.

The EPS guide may have fallen short of some investor expectations, with the real upside starting in fiscal 2029, UBS analysts Karl Keirstead and Radi Sultan wrote. "The EPS guide likely assumes that the financing options/backdrop remain very favorable, which could change," they said.

Oracle is targeting $166 billion in cloud infrastructure revenue by 2030, which is $22 billion higher than the previous target, according to UBS.

However, the guidance raise begins in fiscal 2028, which means it will likely be relatively unchanged for 2026 and 2027, Keirstead and Sultan wrote.

"Oracle needs to stand up material (artificial intelligence) infra capacity and is thereby exposed to various unforeseen go-live bottlenecks," they said.

The updated guidance comes five weeks after Oracle provided backlog metrics that were "far above" Wall Street's expectations, according to the UBS report.

"Oracle and its customers need to deliver, but we remain buy-rated on a belief that the stock can move higher as it executes on this guide acceleration," the analysts said, referring to Microsoft-backed (MSFT) OpenAI, Meta Platforms (META) and xAI as Oracle's clients.

UBS provided several factors supporting a bull case, including upside potential and more visibility on the AI front.

"Oracle hasn't even begun its acceleration," Keirstead and Sultan wrote. "In our view, the stock isn't pricing in the entire upside from the acceleration."

Oracle now has better line-of-sight to AI infra capacity coming online, while the software-as-a-service business could benefit from the company "moving AI features from free-to-paid, the re-org of the sales team and becoming more flexible on pricing/contracting," according to the report.

Price: 289.60, Change: -23.40, Percent Change: -7.48