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Investing.com - Stifel raised its price target on Oracle (NYSE:ORCL), a prominent software industry player with a market capitalization of $678 billion and annual revenue of $57.4 billion, to $350 from $250 while maintaining a Buy rating following the company’s quarterly results.
The research firm highlighted Oracle’s 359% RPO (Remaining Performance Obligation) growth, driven by major contracts with multiple LLM (Large Language Model) vendors, which helped send the stock up approximately 25% in after-hours trading. According to InvestingPro data, Oracle has already delivered strong returns, with a 63% gain over the past six months and an impressive 8.38% revenue growth.
Oracle increased its fiscal year 2026 capital expenditure target to approximately $35 billion based on the significant increase in RPO, with management indicating that RPO is likely to exceed $500 billion in coming quarters.
Beyond generative AI initiatives, Oracle’s multi-cloud database grew more than 1,500%, as the company enables customers to run any LLM on their Oracle data.
Stifel’s new $350 price target is based on approximately 30 times its fiscal year 2028 earnings per share estimate of $11.69.
In other recent news, Oracle Corporation reported its first-quarter earnings for fiscal year 2026, showing a slight miss in both earnings per share (EPS) and revenue. The company posted an EPS of $1.47, just below the expected $1.48, and actual revenue of $14.93 billion, which was short of the $15.03 billion forecast. Despite these results, several analyst firms have raised their price targets for Oracle. Jefferies increased its target to $360, citing substantial growth in remaining performance obligations (RPO), which jumped 359% year-over-year to $455 billion. Cantor Fitzgerald also raised its price target to $400, noting the significant increase in RPO due to contracts with major artificial intelligence companies. Citizens JMP adjusted its target to $342 following Oracle’s record-breaking RPO figures. UBS set a new target of $360, highlighting Oracle’s cloud growth outlook, projecting a 14-fold increase in its cloud infrastructure segment over the next five years. These developments reflect a strong investor interest despite the earnings miss.
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