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Investing.com - Jefferies has reiterated its Buy rating on Oracle (NYSE:ORCL) stock with a price target of $360.00, following a comprehensive analysis of the company’s cloud strategy. The target represents significant upside potential from the current price of $292.18, though InvestingPro analysis suggests the stock is trading above its Fair Value.
The investment firm recommends buying Oracle shares after their 15% pullback from post-earnings highs, citing clear evidence of the company’s market share gains in the artificial intelligence era. Despite the recent pullback, Oracle has delivered impressive returns, with a 96.86% gain over the past six months and an 82.21% return over the last year.
Jefferies believes Oracle’s upcoming analyst day will serve as a positive catalyst as management revises long-term targets, with the firm expecting fiscal year 2029 revenue targets to be at least 50% higher than previously stated.
The research note, spanning over 35 pages, examines Oracle’s position in the cloud computing market while addressing investor concerns regarding RPO (remaining performance obligations), margins, and capital expenditures.
Jefferies projects significant upside potential for Oracle stock, forecasting approximately 75% growth based on estimated fiscal year 2030 earnings per share of around $20, applying a price-to-earnings multiple of 25-30x.
In other recent news, Oracle has secured a monumental $300 billion cloud contract with OpenAI, set to span approximately five years. This agreement is one of the largest cloud contracts ever and underscores the increasing investments in AI data centers. Following this development, several analyst firms have adjusted their outlooks on Oracle. BNP Paribas Exane has raised its price target for Oracle to $377, citing increased Oracle Cloud Infrastructure (OCI) revenue targets. Similarly, TD Cowen increased its price target to $375, highlighting a significant $317 billion quarter-over-quarter growth in remaining performance obligations, attributed to large AI contracts. BMO Capital also raised its price target to $345, pointing to Oracle’s strong bookings and a 359% year-over-year growth in remaining performance obligations. Meanwhile, DA Davidson maintained its Neutral rating with a $300 price target, considering OpenAI’s growth trajectory in the AI sector. These developments reflect the dynamic changes and strategic shifts occurring within Oracle’s business landscape.
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