On July 21, Mizuho told clients that Oracle (ORCL) stock could more than double from here.The bank reiterated its Outperform rating and kept its $320 price target, a call that implies about a 164% rise from Monday’s close.That number stands out because Oracle has been one of 2026’s most punished large-cap tech names.ORCL shares are down about 38% from the start of the year and more than 48% over the past 12 months.So when a major bank says a beaten-down stock can double, the first question worth asking is simple. What does Mizuho see that the bears do not?Why Mizuho is calling Oracle stock a discount buyMizuho analyst Siti Panigrahi framed the case around one word: valuation.Oracle now trades at about 14 times its expected fiscal 2027 adjusted earnings, a level Panigrahi called a clear discount compared to its peers, TipRanks reported.He believes Oracle offers one of the most attractive risk-reward setups.That argument rests on a gap. Oracle is growing faster than many rivals, yet the stock trades cheaper than them.Panigrahi pointed to steadier execution in three areas: converting signed contracts into live capacity, the quality of the backlog, and clearer visibility into how Oracle funds its buildout.Mizuho is arguing that the market has priced Oracle as a troubled spender while ignoring the revenue already under contract.
Oracle has become one of the AI data-center race’s biggest spenders, and its stock has paid the price in 2026.NurPhoto / Getty Images
The backlog Oracle is counting on to grow intoOracle finished fiscal 2026 with remaining performance obligations of $638 billion, up 363% compared to last year.Remaining performance obligations, or RPO, is simply the value of signed contracts a company has not yet delivered.In plain terms, it is revenue Oracle has already booked but still has to build the capacity to serve.That backlog is why Oracle’s management predicts about 34% total revenue growth in fiscal 2027, up from 17% in fiscal 2026.More AI Infrastructure Stocks:UBS says to ‘buy the dip’ in Bloom Energy stockNvidia CEO doubles down on AI and stock market verdictCathie Wood buys $2.1M of tumbling AI stockOracle also signed $67 billion in new AI infrastructure contracts in the fourth quarter alone, much of it prepaid or built on customer-owned hardware.Prepaid deals matter because customers front the cash, which eases the pressure on Oracle’s own wallet.Why Oracle stock fell so far in the first placeThe fear driving the selloff is cost. Building AI data centers is very expensive, and Oracle is spending like few companies ever have.Oracle estimated roughly $90 billion to $95 billion in gross capital spending for fiscal 2027, MLQ reported.Free cash flow ran deeply negative in fiscal 2026 as that buildout accelerated.Here is what investors have been cautious of:A credit profile pushed to BBB-, one grade above junkA capital need that CLSA estimates could reach $500 billion through 2030Roughly $40 billion in planned debt and equity raises for fiscal 2027The picture worsened this week when a New Mexico regulator again rejected the pipeline meant to power Oracle’s flagship Project Jupiter data center, threatening its timeline.How Mizuho’s target stacks up against the rest of Wall StreetA 164% target sounds ambitious until you see where the rest of Wall Street sits.Mizuho is the most bullish voice, but it is not alone in seeing a large rise from these levels.Of the 32 analysts covering Oracle, 28 rate it a Buy or Strong Buy, while four gave a Hold rating. The 12-month average target sits at $259.76.Related: Oracle stock makes rattling move after major setbackThe difference between the average target and today’s price is a signal that Wall Street mostly believes Oracle is worth far more than it trades for. Most analysts want to see a debt or equity raise land cleanly before pricing in the full recovery. Mizuho is willing to price it in now, ahead of that confirmation.How ORCL has moved against the marketOracle has badly trailed the wider market during this stretch, and that shows how much sentiment has turned.Here is the recent scorecard for ORCL:Past five days: down about 4%, near $125.73Past month: down about 28%Year to date: down about 38%52-week range: a low of $120.03 against a high near $346That 52-week range is what Mizuho is leaning on. A stock trading close to $120 with a backlog of over $600 billion is either a value trap or a rare mispricing.What Oracle investors should watch before actingA double-your-money target is exciting, but it depends on several things going right.Before treating Mizuho’s call as a green light, track the catalysts that actually decide the final outcome:Financing clarity. Any large debt or equity raise will show how Oracle plans to close its funding gap, and could pressure shares near term.Power and permits. A resolution on Project Jupiter’s pipeline and air quality permit would remove a concrete delay risk.The next earnings check. Oracle reports first-quarter fiscal 2027 results on September 10, the next real test of whether the backlog is converting.Credit re-ratings. Mizuho flags potential upgrades as a mid-term catalyst, so watch the rating agencies.The bull case is real. Oracle has the demand, the backlog, and a cheaper multiple than its peers.The risk is equally real. A company funding a historic buildout largely on borrowed money has little room for error, and the market is pricing that in.Nothing here is a recommendation to buy or sell. Weigh the growth against the balance sheet and decide what fits your own risk tolerance.Related: Analyst sends chilling Oracle stock verdict