Surging cloud revenue boosted Oracles quarterly results. Heres what analysts are saying
Oracle trounced analysts’ expectations in its latest quarter, powered by a jump in cloud revenue and growing artificial intelligence demand. In its fiscal first-quarter release, Oracle reported revenue of $19.35 billion , up nearly 30% from the year-ago period, while adjusted earnings rose 30% to $1.92 per share. Cloud revenue rose 62% from a year earlier to $11.61 billion, driven by a 121% jump in cloud infrastructure revenue. Oracle brought 850 megawatts of additional data center capacity online during the quarter. ORCL 1Y mountain Oracle stock price – One year The results also removed concerns around the cost of Oracle’s aggressive AI buildout. Remaining performance obligations reached $664 billion, up $209 billion year-over-year. The company booked more than $30 billion of new AI cloud contracts during the quarter. In its financial release, the company said “customer demand for AI Cloud Training and Inferencing Services continues to grow faster than supply.” Oracle expects total revenue for the 2027 fiscal year to be at least $90 billion. The company has taken on more than $100 billion in debt to pay for its data center buildout. Here’s what Wall Street analysts had to say about Oracle’s quarter: Morgan Stanley: Equal weight, $210 price targe t “Oracle’s 1Q provided a near-term proof point on [infrastructure as a service] execution, with Cloud Infrastructure growth accelerating to 121%. However, gross-margin pressure and a modest FY27 EPS raise leave us needing more evidence on GPUaaS economics & visibility on infra build-out before becoming more constructive.” Citi: Buy, $330 price target “Given the magnitude of FQ1 outperformance, we see a favorable setup for upward revisions at Investor Day and AI World. We reiterate our Buy rating, Positive Catalyst Watch, and $330 (~30x FY28 PE) target price on modestly higher estimates.” Bernstein: Outperform, $325 price target “This was another strong quarter that increases clarity around the ORCL thesis as management communications improved. With revenue ramping, RPO increasing, strong margins, and the FY27 guide increased the setup is really strong. … We maintain our price target at $325, as we rolled forward our estimates, but lowered our P/FE multiple from 24.5x to 23.5x, reflecting broader step-down in software peer’s valuation.” Deutsche Bank: Buy, $300 price target “Oracle’s fiscal year got off to a strong start, delivering F1Q results that beat on both the top and bottom line while continuing to selectively build backlog with $30bn+ of AI contracts signed via prepay or [bring your own hardware]-type structures that reportedly won’t require any additional capital from Oracle. The company also confirmed it completed the previously announced $20bn ATM equity program during the quarter, removing what had been viewed by some as an overhang on shares.” Wells Fargo: Overweight, $280 price target “ORCL threaded the needle on its 1Q print, communicating its ability to bring on new RPO/growth opps w/o incremental cash outflows while also messaging confidence in FY targets w/o materially raising guide. A-day remains next catalyst; reit $280 PT.” Barclays: Overweight, $252 price target “We can see how investors will revisit the Oracle story after Q1. Growth inflected (30% YoY from 21% in Q1) and should continue to accelerate from here. The funding set-up looks better after the $20bn ATM equity raise finished and management addressed the delay and margin questions well.” UBS: Buy, $250 price target “The +4% after-market reaction in Oracle shares strikes us as reasonable given what we conclude was a quarter marked by the positives (1Q/Aug revs and EPS beat, guide for further cloud infra acceleration, completion of ATM/secondary) offsetting the negatives (no FY27 revs guide raise). Net, the material AI-driven growth acceleration (30% revs growth from 11% a year-ago) is playing out. We remain Buy-rated.” Bank of America: Buy, $240 price target “We rate Oracle Buy. Our bullish view on Oracle is based on accelerating demand in the company’s [Oracle Cloud Infrastructure] segment. While visibility remains somewhat limited on profitability/capex ROI, the outlook for OCI revenue suggests a step function in demand. It is clear that Oracle is capturing share in the large and rapidly growing market for AI infrastructure, in our view.” JPMorgan: Overweight, $200 price target “We rate Oracle Overweight while establishing a Dec-27 price target of $200 (prior Dec-26 PT of $210) with significant upside to the current share price led by the combination of profit growth helped by largely similar margins on a strong revenue inflection associated with the capacity build-out, as well as an opportunity for a re-rating relative to the valuation multiple the shares trade at, which is a significant discount to comparable peers.”
