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Piper Sandler raised its price target on Oracle (NYSE:ORCL) to $190.00 from $130.00 on Thursday, while maintaining a Neutral rating on the stock. The significant price target increase reflects Oracle’s surprisingly strong RPO (remaining performance obligation) backlog that could potentially double to $276 billion in fiscal year 2026 from $138 billion in fiscal 2025. According to InvestingPro data, Oracle currently trades at a P/E ratio of 40.4x and appears overvalued based on its Fair Value analysis. The stock has shown strong momentum, delivering a 27% return over the past year.
The research firm noted that Oracle has "entered an entirely new wave of enterprise popularity that it has not seen since the Internet era in the late 90s." This renewed popularity is driven by broad-based adoption of Oracle’s cloud database, applications, and AI infrastructure services. With a market capitalization of $494.6 billion and annual revenue of $55.8 billion, Oracle maintains its position as a prominent player in the software industry, as highlighted by InvestingPro’s analysis, which reveals 12+ additional key insights about the company’s market position.
Piper Sandler acknowledged that its previous concerns raised in April about capital expenditure potentially consuming most or all of Oracle’s fiscal 2026 operating cash flows were "premature." These concerns were overshadowed by the strong backlog performance and increased visibility into growth potential.
Despite the higher price target, the firm maintained its Neutral rating, citing "increasing capital intensity risks that could widen the net debt position and pressure margins in the short-run." Piper Sandler believes these risks may elevate volatility and temper multiple expansion for Oracle stock.
The firm raised its estimates for Oracle based on the increasing visibility into the company’s growth potential, which contributed to the substantial 46% increase in the price target from $130 to $190.
In other recent news, Oracle Corporation reported its fourth-quarter earnings for fiscal year 2025, exceeding analyst expectations. The company achieved an earnings per share (EPS) of $1.70, surpassing the forecasted $1.64, while revenue reached $15.9 billion, slightly above the anticipated $15.58 billion. These results highlight Oracle’s strong operational performance, driven primarily by its cloud services and license support segment, which saw a 12% increase. Additionally, Oracle’s full-year revenue grew by 9% to $57.4 billion, with a non-GAAP EPS of $6.00. The company is projecting optimistic growth for fiscal year 2026, expecting total revenue to exceed $67 billion, with cloud revenue anticipated to grow by over 40%. Oracle’s strategic focus on cloud and AI initiatives continues to be a central part of its growth strategy. Furthermore, the company plans significant capital expenditure for cloud expansion, with over $25 billion earmarked for fiscal year 2026. Analyst firms have not provided any recent upgrades or downgrades, but Oracle’s future outlook remains positive according to company executives.
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