Oracle (ORCL) Set to Gain from TikTok U.S. Spinoff, Offering Potential Upside for Investors

Oracle (ORCL) is poised for a potential stock boost as it secures a 15% stake in the newly independent TikTok U.S., following a deal with ByteDance and non-Chinese investors. The agreement resolves national security concerns over TikTok's U.S. operations, which had faced a six-year legal battle. The consortium, including Oracle, MGX, Silver Lake, and Michael Dell’s entity, collectively owns over 80% of the new venture, led by former TikTok head Adam Presser. Oracle’s equity stake extends its existing cloud infrastructure relationship with TikTok, potentially unlocking new revenue streams. Despite this opportunity, Oracle’s stock has declined nearly 50% since September due to massive capital expenditures on AI infrastructure. With projected free cash outflow exceeding $55 billion between fiscal 2026 and 2028, analysts question whether returns will justify these investments. However, Oracle’s strong backlog and recent infrastructure deals suggest robust demand. Analysts forecast revenue growth from $57.4 billion in fiscal 2025 to $227 billion by 2030, with earnings per share rising to $20.50. At current valuations, ORCL could more than double if priced at 20 times earnings. Of 41 analysts, 29 recommend “Strong Buy,” with an average price target of $304, compared to the current $178. This presents a compelling case for investors considering Oracle amid the TikTok spinoff.