Oracle's shares have dropped 17% year to date and more than 50% from their 52-week highs. Despite this, options traders are pricing in an expected earnings move of around 11%, which is higher than the average of 9.5% seen in the last three quarters. This anticipation is influenced by Oracle's history of sharp post-earnings movements, particularly a 35% surge in September 2025.
The current options activity shows a strong preference for call options, with significantly higher open interest on the call side compared to puts, indicating that investors are more willing to pay for potential upside rather than downside protection. For instance, the 180 strike calls were trading at $3.90, while the 144 strike puts were at $2.34, reflecting a bullish sentiment.
Factors contributing to this optimism include Oracle's recent 15% price increase in the past week and a positive outlook on its AI investments, similar to the market reactions seen with Microsoft and Amazon's earnings. However, the key concern remains whether Oracle can sustain its investment in AI infrastructure without incurring additional financial strain