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Investing.com - UBS raised its price target on Oracle (NYSE:ORCL) to $360.00 from $280.00 on Wednesday, while maintaining a Buy rating on the stock. The software giant, currently valued at $678 billion, has shown remarkable momentum with an 8% gain in the past week alone. According to InvestingPro analysis, Oracle appears overvalued at current levels.
The price target increase follows Oracle’s disclosure of $317 billion in incremental backlog, which supports the company’s growth forecast for its cloud infrastructure segment to expand 14-fold over the next five years—from $10 billion in fiscal year 2025 to $144 billion in fiscal year 2030. This ambitious projection builds on Oracle’s solid foundation, with revenue growing at 8.4% over the last twelve months. For deeper insights into Oracle’s growth metrics and valuation, InvestingPro subscribers can access comprehensive research reports covering 1,400+ top stocks.
While Oracle did not disclose specific customers, UBS believes the largest contribution likely comes from OpenAI (estimated at over $100 billion), along with xAI and Meta, noting that this customer diversity reduces risk profile despite high concentration with OpenAI.
UBS highlighted Oracle’s guidance for mid-teens operating income growth in fiscal year 2026 as a positive indicator of tight operational expense and headcount control, compared to UBS’s previous model of 8% growth.
Based on the cloud infrastructure growth outlook, UBS has significantly increased its revenue estimates for Oracle, raising its fiscal year 2029 revenue projection from $134 billion to $163 billion, while adjusting its operating margin estimate from 38% to 37% and non-GAAP earnings per share forecast from $12.51 to $13.98.
In other recent news, Oracle Corporation reported its first-quarter earnings for fiscal year 2026. The company’s earnings per share (EPS) were $1.47, slightly below the expected $1.48. Oracle’s revenue was $14.93 billion, which did not meet the forecasted $15.03 billion. These figures indicate a miss in both earnings and revenue compared to analysts’ projections. Despite these results, Oracle’s stock experienced a rise, driven by strong growth in its cloud services and positive guidance for the future. The market’s response highlights investor confidence in Oracle’s strategic direction. These developments are part of the company’s ongoing efforts to expand its cloud offerings.
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