Oracle’s stock posted impressive gains on Wednesday, leading to optimistic projections from equity analysts at Jefferies. The surge followed an eye-popping announcement from the software giant, revealing a record $455 billion in remaining performance obligations (RPO) for its fiscal first quarter. This figure, which represents contracted future revenue, marked a staggering 359% increase compared to the previous year and surpassed leading cloud competitors, including Microsoft, Amazon, and Google.
Following the earnings report, Oracle’s stock, traded in New York, soared 36%, closing at $328.33. This spike represents the company’s best one-day performance since 1992, and it briefly positioned CEO Larry Ellison as the richest person in the world, overtaking Tesla CEO Elon Musk.
Jefferies analysts believe this momentum may persist, adjusting Oracle’s price target from $270 to $360. This new target suggests a potential 10% upside from Wednesday’s close, highlighting optimism about Oracle’s upcoming outlook. Analysts project that Oracle Cloud Infrastructure will grow 77% year-over-year to reach $18 billion in fiscal 2026, eventually scaling to $144 billion by 2030. This trajectory would mean a compound annual growth rate of nearly 70% from 2025, significantly surpassing consensus forecasts by over $50 billion.
Additionally, Oracle’s multicloud database revenue skyrocketed by more than 1,500% year-over-year, showcasing strong adoption of its multicloud strategy. To further bolster its infrastructure, Oracle plans to add 37 new data centers in the coming years.
However, not all aspects of Oracle’s first quarter met market expectations. Revenue increased by 12% year-over-year, slightly falling short of Wall Street’s forecast of 13%. Both software and infrastructure as a service growth also registered below consensus estimates. In response to increased demand, Oracle raised its capital expenditure forecast to $35 billion for fiscal 2026, a substantial 65% increase, reflecting ongoing supply constraints, particularly in relation to AI workloads.
Despite these challenges, Jefferies emphasized that near-term pressures are outweighed by Oracle’s substantial backlog and the soaring demand for AI-related tasks. Following the initial burst of positivity, Oracle shares continued to rise, trading 1.4% higher in after-hours activity on Thursday, bringing the year-to-date stock increase to a remarkable 97%.
