Oracle stock price target raised to $385 from $350 at Evercore ISI

Investing.com - Evercore ISI raised its price target on Oracle (NYSE:ORCL) to $385.00 from $350.00 on Friday, while maintaining an Outperform rating on the stock following the company’s AI World conference and analyst day. The tech giant, now valued at $892.3 billion, has seen its shares surge 144% over the past six months, though InvestingPro data suggests the stock is currently trading above its Fair Value.

Oracle unveiled updated long-term guidance at the event, targeting fiscal year 2030 revenue of $225 billion, representing a 31% compound annual growth rate (CAGR), and earnings per share of $21, reflecting a 28% CAGR. The company increased its Oracle Cloud Infrastructure (OCI) forecast by $22 billion to $166 billion, projecting approximately 75% CAGR compared to the previous $144 billion target. With the stock trading at a P/E ratio of 72.5x and showing recent revenue growth of 9.7%, investors seeking deeper insights can access comprehensive valuation metrics and 17 additional ProTips through InvestingPro.

The firm noted that Oracle’s gross margin guidance for OCI AI of 30-40% should address investor concerns, contributing to Evercore’s higher FY30 earnings per share projections. Evercore believes Oracle’s OCI momentum positions the company uniquely in the AI infrastructure build-out landscape. According to InvestingPro analysis, Oracle maintains a "GOOD" overall financial health score, with particularly strong marks in profit metrics and price momentum.

Partner conversations validated that Oracle’s agentic and industry strategy in the applications market is driving market share gains, with partners expressing optimism about Oracle’s opportunities in healthcare and banking sectors. Evercore highlighted that Oracle’s ability to deliver integrated, AI-embedded solutions with industry context across the entire technology stack creates opportunities to deepen relationships with existing customers.

The somewhat muted market reaction to Oracle’s strong outlook was attributed to high expectations ahead of the event, according to Evercore, which continues to see a favorable risk/reward profile for the stock at current levels.

In other recent news, Oracle has been making significant strides in its financial and operational performance. Oracle executives announced that they expect the company’s cloud infrastructure revenue to reach $166 billion by fiscal year 2030, highlighting strong growth in their cloud and AI infrastructure sectors. At a recent financial analyst meeting, it was revealed that Oracle’s distributed cloud offering is expanding at a 77% year-over-year rate, with an average deal size of $67 million. Barclays has raised its price target for Oracle to $400, maintaining an Overweight rating, following Oracle’s significant momentum in its infrastructure-as-a-service business, evidenced by $65 billion in total contract value signed in the second quarter.

Meanwhile, Mizuho Securities provided clarity on Oracle’s AI gross margins, which are expected to range between 30% and 40%, following comments from Oracle’s CEO. Citizens reiterated its Market Outperform rating for Oracle, with a price target of $342, citing Oracle’s strong position in AI workloads for major customers. Additionally, the Choctaw Nation of Oklahoma has adopted Oracle’s AI solutions to enhance efficiency and preserve its language, utilizing Oracle Fusion Cloud Applications to streamline operations. These developments underscore Oracle’s ongoing efforts to leverage AI and cloud technologies to drive growth and innovation.

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