Oracle price target raised to $220 from $200 at Jefferies

Jefferies raised its price target on Oracle (NYSE:ORCL) to $220 from $200 on Thursday, while maintaining a Buy rating on the stock. Oracle, currently trading at $213.70 with a market capitalization of $598 billion, has shown remarkable momentum with a 45% return over the past year. According to InvestingPro analysis, the stock appears overvalued at current levels. The research firm cited Oracle’s robust revenue performance obligations (RPO) growth of 41% and fiscal year 2026 guidance of over 100% growth, not including the company’s Stargate initiative.

The firm highlighted that Oracle’s cloud revenue growth is expected to accelerate in fiscal year 2026, reaching 40% compared to 24% in fiscal year 2025. Infrastructure-as-a-Service (IaaS) growth is projected at 70% versus 51% in the previous year, which Jefferies believes underscores a widening supply-demand gap in cloud services. With a robust gross profit margin of 71% and revenue of $57.4 billion in the last twelve months, Oracle continues to demonstrate strong financial performance.

Jefferies acknowledged that Oracle’s fourth-quarter results were mixed, with Software-as-a-Service (SaaS) performance exceeding expectations while IaaS fell short of projections. Despite this mixed performance, the firm expressed confidence in Oracle’s future prospects.

The research firm maintained its Buy rating based on the potential for RPO momentum and revenue conversion to support upside from 32 times calendar year 2026 earnings per share. This outlook reflects Jefferies’ positive view on Oracle’s positioning in the expanding artificial intelligence infrastructure market.

Oracle’s strong RPO growth reinforces the breadth of the ongoing AI buildout across the technology sector, according to Jefferies. The firm’s analysis suggests Oracle is well-positioned to capitalize on increasing demand for cloud infrastructure supporting artificial intelligence applications. InvestingPro data shows Oracle maintains a "GOOD" overall financial health score, with particularly strong momentum and profitability metrics. For deeper insights into Oracle’s valuation and growth potential, including 20 additional ProTips and comprehensive financial analysis, check out the Pro Research Report available on InvestingPro.

In other recent news, Oracle reported better-than-expected revenue and earnings per share for its fiscal fourth quarter, which has led to analysts adjusting their forecasts. BNP Paribas (OTC:BNPQY) Exane raised its price target for Oracle to $226, maintaining an Outperform rating, while UBS increased its target to $225, citing significant backlog growth projected to over $275 billion by fiscal year 2026. DA Davidson also raised its target to $170, noting accelerated growth in Oracle Cloud Infrastructure (OCI), which grew 62% during the quarter. Cantor Fitzgerald adjusted its price target to $216, highlighting Oracle’s strong guidance for Infrastructure as a Service revenue growth, expected to exceed 70% in fiscal 2026.

Oracle’s recent collaboration with AMD (NASDAQ:AMD) involves deploying AMD Instinct MI355X GPUs in its cloud infrastructure, enhancing AI computing resources. This new offering aims to provide improved price-performance and advanced networking capabilities for AI workloads. Oracle’s management has projected 16% constant currency revenue growth for fiscal year 2026, with OCI growth potentially reaching $20-25 billion in annualized revenue by the end of that period. The company also plans significant capital expenditures, primarily due to the demand for AI compute on OCI. Despite concerns about potential margin erosion, analysts remain optimistic about Oracle’s growth prospects, driven by robust demand for AI-related infrastructure.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.