Oracle (ORCL) stock traded sideways Friday as the shares eyed a fourth straight weekly loss, ahead of its fiscal third-quarter earnings on Monday. The database software giant hopes to relaunch its big 2024 rally, but the tech giant faces challenges including a choppy market.

Shares of Oracle are down about 8% year-to-date on the year after rallying nearly 60% in 2024, Oracle stock's best year since 1999. The company's focus on offering AI computing power helped boost its cloud infrastructure business to ignite the rally, while Oracle's overall push toward offering cloud-based software is gaining momentum.

But Oracle's shares slumped starting in December after Oracle's fiscal Q2 earnings came in a touch below estimates. Oracle's involvement in the buzzy Stargate AI project in late January helped reignited excitement about the company's AI potential. But then Chinese startup DeepSeek popped up with a lower-cost AI model that took the shine off Oracle and other AI stocks barely one week after the White House hosted a Stargate announcement.

Those factors have has left Oracle needing a positive earnings reaction to restart momentum. Here's what to watch from the report.

Oracle Earnings Preview: By The Numbers

For its February-ended quarter, analysts expect Oracle's adjusted earnings to increase 11% to $1.49 per share while sales increase 8% to $14.4 billion, according to FactSet. Revenue growth is expected to slow from 9% in the previous quarter.

Investors will likely focus in on Oracle's cloud infrastructure sales. Jefferies analyst Brent Thill, who rates Oracle stock a buy, wrote in a client note this week that the company will need to show cloud infrastructure growth above 50% to show the business is still accelerating. Oracle's cloud infrastructure sales increased 52% in the November-ended quarter.

"For the acceleration narrative to play out, we believe Oracle needs to 1) sustain high levels of OCI demand; 2) turn on data center capacity in a bigger way; 3) convert AI backlog into AI revenue," Thill wrote.

Stargate Watch

It has been nearly two months since Oracle Chairman Larry Ellison appeared at the White House with President Donald Trump, OpenAI leader Sam Altman and SoftBank Chief Executive Masayoshi Son to announce the Stargate AI effort.

Stargate calls for $100 billion in initial investment, with plans for up to $500 billion over the next four years to build AI infrastructure. SoftBank, OpenAI, Oracle, and MGX are the initial equity funders.

But there are still plenty of unanswered questions about the project. Oracle could use the earnings report to update investors on the project.

BNP Paribas Exane analyst Stefan Slowinski wrote Friday that he views Stargate as an "important (and underappreciated) driver" for Oracle's growth but he expects it will have lumpy timing in its rollout.

"We expect management to comment on Oracle's role in the Stargate project, where the company potentially stands to benefit from OpenAI's rapidly rising compute requirements," Slowinski said in a client note.

Slowinski rates Oracle a buy.

Monness Crespi Hardt analyst Brian White, meanwhile, upgraded Oracle stock to neutral from a sell call in a client note Monday. But he was skeptical about the Stargate effort.

"Oracle reveled under the limelight cast upon it by the Stargate Project announcement in January but soon found itself on the ropes with the innovations unveiled by DeepSeek," White wrote. "In the spirt of shortcomings that have come to pass throughout American history with the suffix 'gate' attached, combined with Elon Musk's view of the project, we believe Stargate's moniker may be more apropos than the market fully appreciates."

Oracle Stock Fall Below 200-Day Moving Average

On the stock market today, Oracle stock traded sideways, last up a fraction at 151.60.

Shares earlier this week slumped below Oracle's 200-day moving average. The stock's Relative Strength rating has fallen to 76 out of a best-possible 99. Oracle's RS score was at 88 to start the week.

Meanwhile, Oracle stock has an IBD Composite Rating of 87 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. Further, the best growth stocks have a Composite Rating of 90 or better.

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