Oracle stock price target raised to $360 from $270 at Jefferies

Oracle's stock surged premarket following significant analyst upgrades, driven by a highly bullish outlook on its cloud orders despite a recent slight earnings miss. Jefferies notably raised its price target to $360, citing a 359% year-over-year increase in Remaining Performance Obligations (RPO) to $455 billion, largely due to multi-billion dollar contracts and strong demand for its Stargate technology. This substantial RPO, nearly five times Oracle's expected FY26 revenue, underpins projections for Oracle Cloud Infrastructure (OCI) revenue to reach $144 billion by FY30, significantly exceeding consensus and signaling robust future growth in its cloud and AI-related services.

Analysis

Oracle's market sentiment has turned decisively bullish, driven by an extraordinary 359% year-over-year increase in Remaining Performance Obligations (RPO) to $455 billion for its fiscal first quarter. This surge in contracted future revenue, which includes a sequential addition of $317 billion from just four large contracts, has prompted significant price target upgrades from analysts at Jefferies, Cantor Fitzgerald, and UBS, effectively overshadowing a minor miss on recent quarterly EPS and revenue figures. The scale of this backlog is substantial, representing nearly five times Oracle's projected fiscal 2026 revenue, signaling a fundamental shift in its growth profile. This is underpinned by Jefferies' aggressive forecast for Oracle Cloud Infrastructure (OCI) revenue to reach $144 billion by fiscal 2030, a figure $52 billion above consensus, and a reported 1,529% YoY growth in multicloud database revenue. While the stock's valuation is noted as potentially stretched after a 63% gain over six months, the market is clearly prioritizing the massive, de-risked revenue pipeline as a primary indicator of future performance in the competitive cloud and AI infrastructure space.

Key Decisions for Investors

• Investors should re-evaluate Oracle's long-term growth potential, focusing on the massive $455 billion RPO backlog as a more significant forward-looking indicator than the recent minor earnings miss.
• Despite the strong outlook, consider the risk associated with the stock's 'stretched' valuation and sharp recent appreciation, as significant future growth is now priced in, potentially increasing sensitivity to any execution delays.
• Monitor the conversion of RPO into recognized revenue in subsequent quarters and watch for announcements of new multi-billion dollar deals to validate the projected 70% compound annual growth rate for OCI.