Oracle Corporation (NYSE:ORCL) saw a flurry of price target hikes on Wednesday as analysts reacted positively to the firm’s strong outlook for cloud orders, amid robust artificial intelligence demand, in the coming months.
The company forecast cloud infrastructure revenue growth of about 77% to $18 billion in the current fiscal year, before rising exponentially to $32 billion and $73 billion in fiscal 2027 and 2028, respectively.
Shares of the company surged as much as 27% in aftermarket trade, with markets also largely looking past weaker-than-expected quarterly earnings from the cloud major. Oracle’s weak main figures were also largely overshadowed by a stellar 359% jump in its remaining performance obligations (RPO), which is a gauge of booked revenue.
Jefferies hiked Oracle’s price target to $360 from $270 and maintained its Buy rating on the stock, stating that Oracle’s RPO numbers “stole the show” and reinforced confidence in “ORCL’s acceleration narrative.”
“We see room for the stock to grind even higher as optimism builds around the outlook, especially if backlog growth begins to convert into rev accel,” Jefferies analysts wrote in a note.
BMO Capital Markets hiked Oracle’s PT to $345 from $275 and maintained its Outperform rating on the stock.
The brokerage also lauded Oracle’s RPO performance, and expressed confidence in the cloud firm’s revenue and operating income growth.
Still, BMO flagged some risks in transitioning Oracle’s RPO growth into revenues.
Mizuho hiked Oracle’s price target to $350 from $300 and maintained its Outperform rating.
Mizuho said the strong earnings underscored Oracle’s “rise as a key AI infrastructure provider,” noting that demand from marquee customers such as OpenAI, Meta, xAI, and Nvidia was driving up earnings for its core cloud business.
D.A. Davidson hiked Oracle’s price target to $300 from $220, and maintained its Neutral rating on the stock.
While the brokerage also lauded Oracle’s strong cloud outlook, it expressed some concerns over Oracle’s long-term margins, especially given that “at best, Oracle is operating their virtual machines or GPU rental business at single-digit operating margins, if not serving compute at a loss in some instances.”
Jefferies, BMO, and Mizuho said that Oracle’s next big catalyst was likely to be its AI World conference scheduled for October 13-16.
Oracle’s shares are trading up 45% so far in 2025 following stellar growth over the last three years, as the company benefited greatly from an AI-fueled jump in demand for cloud computing.
The company is expected to continue benefiting from outsized spending on AI by Wall Street’s so-called AI Hyperscalers.
Source :
https://www.investing.com/news/stock-market-news/oracle-sees-flurry-of-price-target-hikes-on-bullish-cloud-outlook-4232567
