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Cantor Fitzgerald raised its price target on Oracle (NYSE:ORCL) to $216 from $175 on Tuesday, while maintaining an Overweight rating on the stock following the company’s fourth-quarter fiscal 2025 earnings report. According to InvestingPro data, Oracle currently trades at a P/E ratio of 40.4x and has delivered a strong 27% return over the past year, though analysis suggests the stock is currently trading above its Fair Value.
The research firm cited Oracle’s strong guidance for its Infrastructure as a Service (IaaS) revenue, which the company expects to grow more than 70% in fiscal 2026. This projection exceeded consensus expectations of 60% growth, according to Cantor Fitzgerald, which had previously estimated 65% growth. The company’s current revenue stands at $55.8 billion, with a healthy gross profit margin of 71.1%.
Oracle’s Remaining Performance Obligation (RPO) grew 41% at the end of fiscal 2025, slightly beating expectations. The company guided for RPO to grow more than 100% in fiscal 2026 excluding Stargate, significantly outpacing the consensus forecast of 22% growth.
Management expressed optimism about fiscal 2027 and even stronger confidence regarding fiscal 2028 and 2029, highlighting continued robust demand for high-end GPU-as-a-Service and other AI-related infrastructure that exceeds supply. This aligns with Cantor Fitzgerald’s pre-earnings research.
The firm noted that Oracle’s gross margin percentage forecasts show a slight decrease due to the mix shift toward Oracle Cloud Infrastructure (OCI), which is expected to eclipse 40% of revenue in fiscal 2028, up from mid-single digits in fiscal 2023. Management indicated that OCI gross margins remain stable despite increased success-based capital expenditures.
In other recent news, Oracle reported impressive earnings and revenue results, exceeding its guidance for both metrics. The company announced a significant increase in its fiscal year 2026 revenue guidance to over $67 billion, marking a 16% year-over-year growth in constant currency. Oracle’s cloud infrastructure and Software (ETR:SOWGn) as a Service (SaaS) segments showed strong performance, with the cloud infrastructure growing 62% year-over-year. Analysts from firms such as Stifel and JPMorgan responded to these results by raising Oracle’s price targets, with Stifel increasing its target to $180 and JPMorgan to $185, while maintaining their respective ratings. BofA Securities also raised its price target to $220, citing Oracle’s cloud subscription growth and increased capital expenditures to meet infrastructure demand. Morgan Stanley (NYSE:MS) and Oppenheimer maintained their ratings, noting Oracle’s ambitious fiscal 2026 growth targets and potential challenges related to cash efficiency and margin profiles. Oracle plans to significantly increase its capital expenditures to $25 billion in fiscal 2026, reflecting its commitment to expanding its cloud infrastructure and AI capabilities. Despite some concerns about operating income growth and margin pressures, analysts generally expressed optimism about Oracle’s growth trajectory in the cloud sector.
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