Oracle Attracts Investors Betting Party is Just Getting Started

Investors are betting Oracle could sustain its share price rally after skyrocketing 12% Tuesday to a record close of $127.54.

Oracle joined the top 10 list of stocks with the highest options volume Tuesday. Call options totalled 303,710, close to double the put options. Options that give the holders the right to buy the stock at $130 attracted the most trading activity.

Even among the contracts expiring next week, the calls that give the holder the right to buy Oracle shares at $130 were the most popular. Volume reached 6,280 for that call, data compiled by Moomoo showed. That's more thanfive times the open interest. Trading activity for these calls surged from almost nothing just last Friday, when the stock closed at $112.42.

Prices of those call options soared 59%. That $130 strike price was also the most popular for contracts expiring on March 15, with volume reaching more than 43,730 from almost nothing last Friday.

Oracle is also attracting large investors and speculators with block trades. A buyer paid about $270,000 in premium for the right to buy 300,000 shares at $130 by the end of the week. That trade was posted at 9:52:55 a.m. in New York Tuesday.

The company is turning non-believers into bulls after its financial results for fiscal third quarter beat estimates. Its executives and equity analysts who cover the stock are also optimistic about its future.

Oracle's total remaining performance obligations climbed 29% to an all time high of more than $80 billion, buoyed by new largest cloud infrastructure contracts, Oracle CEO Safra Catz said in a press release Monday. About 43% of that amount is expected to be recognized as revenue over the next four quarters, while the company's Gen2 Cloud Infrastructure business is seen remaining in "hypergrowth" phase for the foreseeable future, Catz said.

At least 13 analysts raised their price target on the stock after the results, with the most optimistic outlook from Bernstein that sees Oracle reaching $159, according to data published by Benzinga Tuesday. Bernstein's target was raised from an already bullish price of $147.

The company's cloud growth "stands out," Bank of America said in an analyst note that showed the analyst raising the price target to $144, from $122, according to MT Newswires.

"This bodes well for future growth," BofA said.

Still, not everyone is bullish. Twelve of 15 technical indicators tracked by Moomoo, including the relative strength index, are flagging that the stock is already oversold after Tuesday's rally.