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Oracle Corporation’s (NYSE: ORCL) stock has been on a remarkable run, surging over 15% in the past three trading days and reaching an all-time high. The tech giant’s impressive performance can be attributed to its strong first-quarter earnings, upbeat revenue forecast, and strategic partnerships that are fueling its cloud and AI growth.
Main Points
Oracle Bumps Up Fiscal 2026 Revenue Forecast
Oracle has revised its revenue forecast for fiscal 2026, now expecting at least $66 billion, around $1.5 billion more than analysts had anticipated. The company also projected revenues exceeding $104 billion for the 2029 fiscal year, along with an anticipated year-over-year increase in earnings per share of 20%.
CEO Safra Catz emphasized the importance of partnerships that enable businesses to utilize Oracle’s database software via leading cloud service providers, including Amazon, Google, and Microsoft. The company’s alliance with Amazon, announced earlier this week, is expected to further boost its cloud revenue.
AI Push Drives Cloud Demand for Oracle
Despite being a late entrant to the cloud business, Oracle’s rapid AI investments have made its software an attractive option for companies looking to streamline operations. Revenue from its cloud products, seen as a less expensive option compared to Microsoft and Amazon, rose 21% to $5.6 billion in the first quarter, while its overall revenue of $13.31 billion beat estimates.
Stifel analysts said Oracle’s revenue will grow further, thanks to increasing AI infrastructure bookings and its tie-ups with cloud services. If current share gains hold, Oracle is set to add around $39 billion to its market value.
Partnerships with Cloud Giants Boost Oracle’s Prospects
Oracle is partnering with rival cloud service providers to make it simpler for customers to connect their data across vendors. The company recently announced a tie-up with Amazon Web Services, after having signed a similar deal with Alphabet’s Google Cloud in June.
Bernstein analysts noted, “Now with the help of all big three (Azure, Google Cloud and now AWS joining force), we will continue to observe a nice cloud revenue lift as well as growth acceleration thanks to the multi-cloud partnership.
Bernstein has identified Oracle as a “top investment idea” for those looking to capitalize on the cloud sector, expressing optimism about the company’s future. The firm has assigned an outperform rating to Oracle’s stock, setting a price target of $175, which suggests a potential increase of over 11% from the closing price on Wednesday.
Analyst Mark Moerdler highlighted the diversity of Oracle’s customer base and the robustness of its workloads as crucial factors behind the recommendation. He emphasized that Oracle provides an expanding array of solutions tailored to meet the specific needs of a substantial segment of the market that traditional competitors do not adequately address.
Melius Research has also raised its rating on Oracle stock to Buy, citing confidence in the company’s AI capabilities and partnerships. The forecast suggests that Oracle could achieve an earnings per share (EPS) run rate close to $8.50 within the next two years.
Oracle’s Cloud Infrastructure Powered by Nvidia
Oracle’s cloud infrastructure is powered by Nvidia’s hardware, which is considered the gold standard for AI chips. This partnership further strengthens Oracle’s position in the AI and cloud computing space.
Valuation and Market Performance
Oracle’s shares have risen more than 32% year-to-date, outperforming Microsoft and Amazon, which have added 8% and 15%, respectively. The stock is trading at a forward price-to-earnings ratio of 21.30, lower than Microsoft’s 29.81 and Amazon’s 31.50
Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.
