Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - Phillip Securities has initiated coverage on Oracle (NYSE:ORCL) with a Buy rating and a price target of $350.00, joining 19 other analysts who have revised their earnings estimates upward for the upcoming period according to InvestingPro data. The stock has demonstrated strong momentum, delivering a 74.63% return year-to-date.
The firm highlighted Oracle’s remaining performance obligations (RPO) backlog, which increased 359% in the first quarter of fiscal year 2026 to $455 billion, representing 7.9 times FY25 revenue. This growth was attributed to multi-billion-dollar deals including major multicloud partnerships, AI training and inference, and Project Stargate. The company’s revenue growth stands at 9.67% over the last twelve months, with current revenue reaching $59.02 billion.
Oracle has provided guidance for its Cloud Infrastructure to reach $144 billion by FY30, implying a 68% compound annual growth rate over four years. Phillip Securities noted that Oracle can accelerate profit growth by scaling capacity and converting its backlog.
The research firm described Oracle as a niche Infrastructure as a Service (IaaS) and full-stack AI provider that is gaining traction with flexible Oracle Cloud Infrastructure (OCI) deployments and strong compliance capabilities for regulated industries. Oracle’s partnerships with major cloud providers and chipmakers support AI training, inference, and database integration.
Phillip Securities’ $350 price target is based on a 5-year discounted cash flow model that factors in high capital expenditures in the first two years and Oracle’s long-term guidance. The firm justified Oracle’s higher price-to-earnings ratio, currently at 67.34 according to InvestingPro, by pointing to its strong 85% return on equity, which it noted is well above the hyperscaler average. For deeper insights into Oracle’s valuation and over 30 additional key metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Oracle Corporation reported earnings from its GPU-powered cloud services, generating approximately $900 million in revenue for the quarter ending in August. However, the gross profit from these services was $125 million, representing a 14% gross margin, which has raised profitability concerns. Despite this, Mizuho analyst Siti Panigrahi maintained an Outperform rating on Oracle, suggesting the stock’s decline presents a buying opportunity. In another development, Oracle NetSuite expanded its SuiteCloud Platform with new AI capabilities, allowing users to integrate AI models and design custom AI agents. The platform includes an AI Connector Service built on open standards to enhance AI-driven workflows. Additionally, Oracle NetSuite introduced the AI-powered NetSuite Next platform, embedding conversational AI and automated workflows for improved business insights. In a move to streamline operations, non-alcoholic beer brand BERO adopted Oracle NetSuite’s business management suite to support its international growth. These developments highlight Oracle’s ongoing efforts to enhance its cloud and AI offerings.
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