Oracle earnings give analysts hope the stock can recover. Here's what they said
Analysts across Wall Street were happy after Oracle delivered stronger-than-expected fiscal third-quarter results , with accelerating cloud infrastructure growth helping ease concerns about the scale and profitability of its artificial intelligence infrastructure investments. The software giant reported adjusted earnings of $1.79 per share on revenue of $17.19 billion. Analysts polled by LSEG had expected earnings of $1.70 per share and $16.91 billion in revenue. Oracle also reported $8.9 billion in total cloud revenue, beating the $8.85 billion StreetAccount consensus. This figure represents a 44% increase. The $4.9 billion it reported in cloud infrastructure is an 84% surge and was also stronger than the 68% growth Oracle had reported in the prior quarter. Guidance was also better than expected. “Executing to the high-end of guidance for Cloud and Total revenues, with op margins ahead of consensus, should begin to reassure investors on Oracle’s ability to execute to a large opportunity ahead,” added Morgan Stanley analyst Keith Weiss. Shares rallied more than 10% in the premarket following the results and strong guidance. The gain is a welcomed one as the stock enters Wednesday’s session down more than 10% year to date. “With skepticism and debate around the profitability of AI infrastructure (not just Oracle’s), it was helpful to hear disclosure of a blended 32% gross margin across all AI capacity delivered in the quarter relative to the company’s 30% benchmark,” said Deutsche Bank’s Brad Zelnick. The report even led JPMorgan’s Mark Murphy to upgrade the stock to overweight. Here’s what analysts at some of Wall Street’s biggest shops had to say. JPMorgan: overweight rating, $210 price target JPMorgan analyst Mark Murphy upgraded the stock from neutral. His price target, down from $230, still implies about 41% upside. “While the earnings call provided limited incremental color on OpenAI and Stargate, the absence of negative news or RPO-writedown may be interpreted as modestly positive signaling. Overall, we respect the accelerating growth being delivered at this scale, believe Oracle deserves credit for execution, and view ORCL shares, which are well off of recent highs when they closed at $328 in September 2025, as offering a more favorable risk-reward dynamic.” Deutsche Bank: buy, $300 Deutsche Bank’s forecast corresponds to upside of 101%. “We reiterate our Buy rating on Oracle following better-than-expected F3Q results, featuring Cloud revenue growth coming in at the high end of guidance for the first time in over 2 years. Underpinning the strength here was OCI +81% y/y @cc, well above our +75% estimate, driven by strong execution including the delivery of > 400MW of capacity to customers in the quarter. The remainder of the business also performed well, altogether resulting in total revenue and adj. EPS +2% and +5% above Street estimates, respectively, and both growing > 20% organically for the first time in over 15 years. Very importantly, we think messaging and disclosure relative to key investor debates we discussed in our preview was helpful, especially as we think about capital allocation and the profitability of AI infrastructure.” Wells Fargo: overweight, $280 The bank’s target calls for 87% upside going forward. “Estimates continue to nudge higher as ORCL extends its roster of large AI deals (RPO + $29B q/q, est ~$47B bookings in-qtr). OCI growth story remains early with multiple qtrs of acceleration ( & IaaS share gains) still ahead.” Barclays: overweight, $240 The bank’s forecast, up from $230, is 61% above Tuesday’s close. “We see ORCL shares starting to work better from here again as Q3 addressed several investors concerns around CapEx needs,the GM profile of contracts and ORCL’s ability to deliver capacity on time. With the other parts (SaaS, maintenance, etc) also performing well there is plenty of upside now.” Goldman Sachs: buy, $228 Goldman Sachs’ target equates to 53% upside. “Oracle is indicated up 9% post its 3QFY (February) report. We believe the stock reaction reflects OCI forecasts being revised higher (cloud services guided to 2-6pts of acceleration in 4Q; and total revenue guidance increased to $90bn in FY27, 4% above the Street) on the same FY26 capex (guidance maintained at ~$50bn), as well as incremental datapoints that increase visibility into the timing and profitability of the AI infrastructure build.” Morgan Stanley: equal-weight, $213 The bank’s forecast implies about 43% upside from here. “Executing to the high-end of guidance for Cloud and Total revenues, with op margins ahead of consensus, should begin to reassure investors on Oracle’s ability to execute to a large opportunity ahead. Given the pressure seen in the ORCL multiple, steps in the right direction should yield relief.”
