On Wednesday, Oracle (NYSE:ORCL) announced quarterly results that surprised Wall Street with four separate multibillion-dollar contracts tied to artificial intelligence. The deals highlight Oracle’s expanding role in the AI boom and sparked a surge in ORCL stock.
The news also thrust founder Larry Ellison back into headlines, joining Tesla (NASDAQ:TSLA) CEO Elon Musk in the global race for wealth. While investor focus is not on Ellison’s net worth, the contracts underscore Oracle’s rapid transformation from a traditional software firm to an AI powerhouse seemingly overnight.
The key question now is whether this momentum in ORCL stock is sustainable—and how investors might consider trading the stock after such a dramatic move.
Reading the Charts on ORCL Stock
Technical analysis of ORCL stock offers mixed signals.
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Daily Chart: ORCL stock had recently drifted lower ahead of earnings but quickly rebounded and exploded higher after the results. This pattern is unusual, signaling a strong reaction to unexpected news.
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Weekly Chart: The weekly setup is more difficult to interpret, largely because the sharp rally distorted the signal. For now, the weekly timeframe offers little clarity.
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Monthly Chart: Looking at the longer trend, Oracle has been in a steady uptrend stretching back decades, even through the dot-com boom of the late 1990s. Long-term investors may note that a 20%–40% pullback would not necessarily break this pattern.
The comparison to the dot-com bubble is telling. Indicators show Oracle’s current levels, while elevated, are far less extreme than the speculative highs of the early 2000s. This suggests that while ORCL stock is richly valued, it may not be entering bubble territory.
How Investors Can Trade ORCL Stock
The challenge after such a sharp rally is finding a sensible way to manage risk. One approach is using a collar strategy, which sets predefined upside and downside levels through options.
Here’s an example based on Wednesday’s closing prices:
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A call option at $380 provides around 18% additional upside potential.
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A put option at $290 caps the downside at roughly 10%.
At first glance, that may not look like an appealing risk-reward setup. But in this case, the collar can actually be structured at a negative net cost—meaning the investor collects a small premium, about 2% of the stock’s value, upfront.
That bonus payment can then be used to purchase another put option as pure downside protection. While this uncovered put introduces additional risk, it provides an opportunity to profit if ORCL stock declines while still allowing for upside participation.
This strategy shows how investors can use options not only to hedge but also to position for both potential gains and losses in highly volatile environments.
The Bigger Picture for ORCL Stock
The surge in ORCL stock reflects a broader trend: big tech companies rushing to secure AI leadership. Oracle’s new contracts signal that it has earned a place alongside peers like Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) in powering enterprise-grade AI systems.
However, investors must balance enthusiasm with caution. Sudden moves often lead to sharp corrections, and ORCL stock is no exception. While the long-term trend looks solid, near-term volatility should be expected.
For those with higher risk tolerance, Oracle’s AI momentum may justify holding or even adding exposure. More conservative investors might prefer waiting for a pullback or using hedging strategies like the collar to reduce downside risk.
Bottom Line
ORCL stock has entered a new phase, propelled by massive AI contracts that could reshape its future. While technical signals are mixed, the company’s transformation into an AI leader is undeniable. Options strategies such as collars allow investors to navigate the uncertainty while still participating in potential upside.
As with any stock that surges on game-changing news, discipline is key. Oracle may now be one of the most intriguing names in AI, but managing risk is just as important as chasing growth.
Featured Image: Unsplash
Author Stephanie Bédard-Châteauneuf 
