U.S. stocks edge higher ahead of key Fed rate decision; Nvidia retreats
Investing.com - Wolfe Research has raised its price target on Oracle (NYSE:ORCL) to $400 from $300 while maintaining an Outperform rating, citing the company’s extraordinary growth in cloud infrastructure driven by artificial intelligence demand. The software giant, now valued at $678 billion, has seen its stock surge over 63% in the past six months, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.
Oracle tripled its remaining performance obligations (RPO) to $455 billion, with four multi-billion-dollar contracts signed in the first quarter, including the Stargate project. The company provided guidance for Oracle Cloud Infrastructure (OCI) revenue through fiscal year 2029, projecting $144 billion with a compound annual growth rate of 68% from FY26 to FY30. With annual revenue of $57.4 billion and a robust financial health score rated as "GOOD" by InvestingPro, Oracle maintains its position as a prominent player in the software industry.
For the first quarter, Oracle reported total revenue of $14.9 billion, representing 12% year-over-year growth, with cloud growth of 28% in line with guidance. The company noted that demand continues to outpace supply, leading Oracle to increase its FY26 capital expenditure guidance by $10 billion to $35 billion.
Wolfe Research highlighted that Oracle’s committed OCI demand now exceeds all hyperscaler peers, while its incremental capital expenditure investment remains comparatively modest. The research firm noted that Oracle’s RPO is 21% greater than Microsoft’s, despite Oracle’s next-twelve-months revenue base being just 21% of Microsoft’s.
The company expects operating income growth to accelerate next year, which Wolfe Research believes should ease investor concerns about profitability as Oracle continues its significant infrastructure expansion to meet AI-driven demand.
In other recent news, Oracle has reported significant developments following its fiscal first quarter 2026 results. The company saw a remarkable 359% year-over-year increase in its Remaining Performance Obligations (RPO), reaching $455 billion. This growth was largely driven by substantial contracts with major artificial intelligence companies. In response to these results, several financial firms have adjusted their price targets for Oracle. Cantor Fitzgerald raised its target to $400, maintaining an Overweight rating. Jefferies also increased its target to $360, citing the impressive RPO growth. Similarly, Stifel set a new target of $350, highlighting the impact of contracts with Large Language Model vendors. Evercore ISI adjusted its target to $340, noting the accelerating Oracle Cloud Infrastructure backlog. Lastly, DA Davidson raised its target to $300, maintaining a Neutral rating.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.