Oracle price target raised to $170 from $140 at DA Davidson

DA Davidson raised its price target on Oracle (NYSE:ORCL) to $170 from $140 while maintaining a Neutral rating, citing accelerated growth in Oracle Cloud Infrastructure (OCI). According to InvestingPro data, Oracle’s stock is currently trading at elevated multiples, with a P/E ratio of 40.4x and strong momentum, having delivered a 27% return over the past year.

Oracle reported $15.9 billion in total revenue for its fiscal fourth quarter of 2025, growing 11% year-over-year in constant currency. OCI continued to drive Oracle’s reacceleration into low double-digit growth, with OCI specifically growing 62% during the quarter, up from 51% growth in the previous quarter. The company’s total revenue for the last twelve months reached $55.8 billion, with an impressive gross profit margin of 71.1%.

The firm noted that demand for AI compute primarily fueled OCI’s growth acceleration. Management also highlighted increased demand for Oracle 23 AI, a vector database helping customers build AI applications. Looking ahead, Oracle guided for 12% total revenue growth at the midpoint for the next quarter, with total cloud growth expected to reach 28%.

Oracle expects OCI growth to exceed 70% in fiscal year 2026, partly due to noncancelable bookings in remaining performance obligations. Capital expenditures reached $9.1 billion this quarter, with management projecting over $25 billion for the full fiscal year 2026, primarily due to continued disparity between supply and demand for AI compute on OCI.

Despite the growth outlook, DA Davidson expressed reservations about Oracle’s profit growth due to mix shift concerns. The firm believes Oracle is transitioning from 50% operating margin legacy businesses to GPU rental operations with operating margins in the teens, potentially limiting earnings growth to single digits even with 16% revenue growth. For deeper insights into Oracle’s valuation and growth prospects, InvestingPro subscribers can access exclusive analysis, including 14 additional ProTips and comprehensive financial health scores that help evaluate the company’s long-term potential.

In other recent news, Oracle has reported strong fourth-quarter earnings for fiscal year 2025, with notable growth in its cloud services. The company exceeded revenue and earnings projections, with Oracle Cloud Infrastructure (OCI) showing a 62% year-over-year increase, according to Stifel. Oracle has raised its fiscal year 2026 revenue guidance to over $67 billion, representing a 16% increase from the previous forecast. Cantor Fitzgerald highlighted Oracle’s expectation for Infrastructure as a Service (IaaS) revenue to grow more than 70% in fiscal 2026, surpassing consensus estimates.

Analysts have responded with various adjustments to Oracle’s stock price targets. Cantor Fitzgerald raised its target to $216, while BofA Securities increased its target to $220, both maintaining positive outlooks on the stock. Stifel, maintaining a Hold rating, raised its target to $180, expressing caution over potential capital expenditure needs. Meanwhile, Morgan Stanley (NYSE:MS) reiterated its Equalweight rating with a $175 target, noting mixed signals in Oracle’s fourth-quarter results despite ambitious fiscal 2026 guidance. Oppenheimer maintained a Perform rating, citing valuation concerns but recognizing Oracle’s strong growth outlook, particularly in its cloud offerings.

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