Analysts are expressing astonishment over Oracle’s cloud growth projections outlined in the company’s recent first-quarter report. Despite failing to meet Wall Street’s consensus earnings and revenue predictions, Oracle’s announcement regarding its remaining performance obligations (RPO)—a key indicator of contracted revenue not yet recognized—was a standout. The company revealed a staggering 359% increase in RPO from the previous year, reaching $455 billion. Furthermore, Oracle projects its cloud infrastructure revenue to soar to $144 billion by the fiscal year 2030, a significant jump from $10.3 billion in fiscal 2025.
During the quarter, Oracle’s CEO, Safra Catz, highlighted the signing of four multibillion-dollar contracts with three distinct customers, underscoring the company’s growing influence in the artificial intelligence (AI) sector. The market responded enthusiastically, with Oracle shares climbing 30% in premarket trading on Wednesday, positioning the stock for its best day since the dot-com boom of 1999. Year-to-date, Oracle shares have surged nearly 45%.
The positive reception from analysts has led to raised price targets for Oracle’s stock, as many contend that its revenue is increasingly driven by its GPU-as-a-Service offerings. Bank of America notably upgraded Oracle to a “buy” rating and increased its price target by $73 to $368, suggesting a potential upside of 52.4% from the previous day’s closing price. Analyst Brad Sills pointed out that while capital expenditure (capex) visibility has been a concern, the projected 51% compound annual growth rate for Oracle Cloud Infrastructure (OCI) revenue signals a robust shift in demand.
Several major firms provided insights on Oracle’s strong performance:
-
UBS maintained a buy rating while raising its price target by $80 to $360. They noted that Oracle’s strong backlog, which ballooned to $455 billion—$317 billion of which was added in just the recent quarter—positions the company for significant upward revisions in future estimates.
-
Morgan Stanley kept an equal weight rating with a $246 price target, referring to the $332 billion in bookings Oracle achieved as unprecedented within the software sector and a clear signal of a fundamental business model shift.
-
Deutsche Bank retained a buy rating, setting a price target at $335. Analyst Brad Zelnick emphasized that the results exceeded high expectations and affirmed Oracle’s leadership in AI infrastructure through their extensive technological capabilities.
-
Barclays reiterated an overweight rating with a price target of $281, predicting that Oracle’s increasing significance from large contracts will drive shares higher, while long-term revenue targets may need to be revised upward.
-
Guggenheim increased its price target to $375, reflecting optimism about Oracle’s prospects, especially given its historical background in technology and recent advancements.
-
Stifel also maintained a buy rating, raising their target to $350. They noted that the massive RPO growth tied to major contracts and a rising capex forecast suggest continued strong demand in the coming quarters.
As Oracle embarks on this promising trajectory, fueled by AI infrastructure contracts and strategic growth initiatives, analysts are closely monitoring its ability to capitalize on emerging trends in the tech sector, particularly within artificial intelligence and cloud computing.
