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Investing.com - Jefferies has raised its price target on Oracle (NYSE:ORCL) to $360.00 from $270.00 while maintaining a Buy rating, citing the company’s substantial growth in remaining performance obligations (RPO). The stock has already shown impressive momentum, gaining 8% in the past week and 63% over the last six months. According to InvestingPro analysis, Oracle’s current valuation appears stretched relative to its Fair Value, though the company maintains a "GOOD" overall financial health score.
Oracle’s RPO jumped 359% year-over-year to $455 billion in fiscal first quarter, surpassing other hyperscalers as of the second calendar quarter of 2025. The company added $317 billion sequentially in RPO, which Jefferies notes is nearly five times Oracle’s expected total revenue of $67 billion for fiscal year 2026. With a market capitalization of $678 billion and revenue growth of 8.4% over the last twelve months, Oracle continues to demonstrate its market dominance. InvestingPro subscribers can access 10+ additional key insights about Oracle’s growth trajectory and financial health.
The significant increase in RPO is largely attributed to four multi-billion contracts across three customers, with a portion involving Oracle’s Stargate technology. Jefferies indicates more multi-billion deals are expected to close soon, potentially pushing RPO beyond $500 billion.
Oracle Cloud Infrastructure (OCI) revenue is expected to grow 77% year-over-year to $18 billion in fiscal year 2026, scaling to $144 billion by fiscal year 2030, representing approximately a 70% compound annual growth rate from fiscal year 2025’s $10.2 billion. This target exceeds consensus estimates for fiscal year 2030 by approximately $52 billion.
The company posted 1,529% year-over-year growth in multicloud database revenue, highlighting adoption of Oracle’s multicloud strategy. Management expects multicloud revenue to grow substantially every quarter for the next several years while expanding to 71 data centers across hyperscaler peers, a net addition of 37.
In other recent news, Oracle Corporation reported its first-quarter earnings for fiscal year 2026, revealing a slight miss in both earnings per share (EPS) and revenue compared to forecasts. The company posted an EPS of $1.47, just below the expected $1.48, and actual revenue of $14.93 billion, falling short of the $15.03 billion forecast. Despite these misses, Oracle’s strong cloud growth and positive future guidance have been notable. Analysts have responded to Oracle’s recent developments with various price target increases. Cantor Fitzgerald raised its price target to $400, citing a 359% year-over-year growth in Remaining Performance Obligations (RPO), largely due to contracts with major artificial intelligence companies. Citizens JMP also increased its price target to $342, noting record-breaking RPO of $455 billion. UBS raised its price target to $360, supported by Oracle’s disclosure of $317 billion in incremental backlog and a robust growth forecast for its cloud infrastructure segment. These updates reflect a strong analyst sentiment towards Oracle’s future performance.
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