By US stocks’ recovery over the past two months following the initial plunge related to higher tariffs under the Trump administration has pushed some S&P 500 stocks into the overbought territory.
Based on the 14-day Relative Strength Index (RSI) – a momentum indicator often used to evaluate whether a stock is due for a pullback – these include Micron Technology Inc. (NASDAQ: MU) and Oracle Inc. (NYSE: ORCL).
However, there’s still reason to believe that neither ORCL nor MU shares are out of juice yet. Both could push further to the upside in the back half of 2025.
What could help Oracle stock extend gains in H2?
Oracle ended last week on a solid note after reporting better-than-expected financials for its Q4. The post-earnings rally pushed ORCL’s relative strength index up significantly to 90.4, a level indicative of extremely overbought conditions.
However, investors should note that the market’s response wasn’t based merely on speculation. It was grounded in strong guidance and bullish commentary from management.
In the earnings press release, Safra Catz, the chief executive of Oracle, said she expects the firm’s cloud infrastructure revenue to grow more than 70% on a year-over-year basis in 2026.
“Next year will be even better as our revenue growth rates will be dramatically higher,” she added, hinting at growing momentum in a space dominated by Amazon Web Services and Microsoft Azure.
ORCL’s expanding position in artificial intelligence (AI) workloads and demand for its Gen2 cloud infrastructure have redefined its growth narrative.
Therefore, it’s reasonable to expect that Wall Street analysts will revise their estimates for Oracle stock after the company’s blockbuster quarter.
Note that ORCL shares currently pay a dividend of 0.93% as well, which makes them even more exciting to own in 2025.
What could help Micron stock extend gains in H2?
Micron shares also currently sit in the extremely overbought territory with an RSI of just over 85.
However, the management’s recently announced plans of investing up to $200 billion to boost US semiconductor manufacturing could keep investors interested in MU stock in the second half of 2025.
The aforementioned initiative is expected to create some 90,000 direct and indirect jobs in the US. Micron stock could benefit from it, particularly because the Trump administration is committed to onshoring production to lower America’s reliance on other nations.
From a demand perspective, MU stock continues to capitalise on a cyclical upturn in memory chip pricing and expectations of rising AI-driven demand for DRAM (Dynamic Random Access Memory) and NAND (NAND Flash Memory).
Much like ORCL, Micron is a dividend stock as well that currently yields 0.40%. Therefore, while technical traders may be cautious due to the elevated RSI, long-term investors may find Micron’s strategic vision and capital deployment compelling enough to justify sticking with the rally.
The post ORCL, MU among most overbought stocks: here’s why they are still worth buying appeared first on Invezz
