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Investing.com - Evercore ISI has raised its price target on Oracle (NYSE:ORCL) to $340.00 from $270.00 while maintaining an Outperform rating on the stock. The upgrade comes as Oracle’s stock has shown remarkable momentum, with an 8.08% return in the past week and a 63.25% surge over the last six months. According to InvestingPro, Oracle maintains a "GOOD" overall financial health score.
The firm cited Oracle’s accelerating OCI (Oracle Cloud Infrastructure) backlog as the key takeaway from the company’s fiscal first quarter results, which were broadly consistent with expectations. This acceleration reinforces Oracle’s projection for faster revenue and EPS growth in the future.
Oracle reported total revenue of $14.9 billion in the quarter, up 11% and in line with estimates. Non-GAAP EPS came in at $1.47, also aligning with expectations. Total cloud revenue grew by 27% in constant currency to $7.2 billion, while software revenue fell by 2% to $5.7 billion.
The company’s non-GAAP operating margin was 42%, exceeding analyst estimates of 39.6% to 41.2%. Evercore noted that while Oracle’s OCI build-out requires elevated capital expenditure, the firm believes long-term investors will accept this trade-off to secure a leadership position in next-generation AI infrastructure.
Beyond AI, Evercore highlighted that other parts of Oracle’s infrastructure portfolio, including sovereign and multi-cloud database offerings, are outperforming the market and remain integral to the company’s long-term growth story, particularly regarding potential growth in enterprise AI inferencing over the next 3-5 years.
In other recent news, Oracle has seen significant developments following its latest financial results. The company reported a 359% year-over-year increase in Remaining Performance Obligations (RPO), reaching a record $455 billion. This substantial growth has been attributed to major contracts with artificial intelligence companies. Analysts have responded positively, with several firms raising their price targets for Oracle. Stifel increased its target to $350, Jefferies to $360, Cantor Fitzgerald to $400, and Citizens JMP to $342, all maintaining favorable ratings. UBS also raised its target to $360, citing Oracle’s cloud growth outlook and a $317 billion increase in backlog. These developments reflect Oracle’s strong performance and potential future growth in its cloud infrastructure segment.
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