Oracle shares rose 3% on Friday after gaining nearly 7% in after-hours trading on Thursday

Oracle shares rise: Cloud business and AI contract data are bright, Wall Street maintains bullish ratings

Oracle (NYSE: ORCL) shares rose sharply in pre-market trading on Friday. Earlier, new data released after hours on Thursday showed that its cloud business, AI contracts and revenue backlog were better than expected, pushing its stock price up nearly 7% after hours on Thursday and continued to rise 3% in early trading on Friday. Investor concerns about Oracle's huge spending on artificial intelligence infrastructure have eased, mainly due to a $26 billion increase in its backlog of orders.

Strong earnings performance: Revenue and profits increased, and cloud infrastructure grew explosively

Oracle's fiscal first-quarter results exceeded Wall Street expectations. Specific data showed that the company's revenue reached US$19.35 billion, a significant increase of approximately 30% year-on-year; adjusted earnings per share was US$1.92, a year-on-year increase of 30%.

Among them, cloud business revenue performed particularly well, with a year-on-year increase of 62%, reaching US$11.61 billion. Cloud infrastructure sales soared 121%. In addition, Oracle added another 850 MW of data center capacity during the quarter.

Strong demand for AI: Record backlog of orders, full-year revenue forecast is raised

As of the end of the quarter, Oracle recorded approximately US$664 billion in remaining performance obligations (i.e. revenue contracted but not yet confirmed), an increase of US$209 billion from the previous year. In addition to its huge backlog of orders, the company has also won AI cloud contracts worth more than $30 billion.

According to a financial report released by Oracle,"Customer demand for AI cloud training and reasoning services continues to exceed supply." Based on this strong momentum, Oracle expects total revenue to reach at least US$90 billion in fiscal year 2027.

Summary of institutional ratings: Most maintain buying or increasing holdings, focusing on capital conditions and profit margins.

Several Wall Street financial institutions have released the latest ratings and target price for Oracle:

• Deutsche Bank: Maintain the "Buy" rating with a target price of US$300. The bank pointed out that the new AI contracts are all upfront payments and include "bring your own hardware" transactions, which means Oracle does not need to invest a lot of extra money. In addition, the company has completed a US$20 billion mark-to-market equity plan.
• Morgan Stanley: maintains an "equal weight" rating with a price target of $210. Citing the opinion: "Oracle provided recent evidence of IaaS execution in the first quarter, with cloud infrastructure growing by 121%."
• Citi: maintains a "buy" rating with a price target of $330 and maintains a "positive catalyst watch." "Given the above-expected performance in the first quarter, we believe there are favorable conditions for upward revision of expectations at Investor Day and the AI World Conference," the bank said. Its target price is based on a profit multiple of approximately 30 times for fiscal year 2028 and a slightly higher estimate.
• Bernstein: Maintain an "outperform" rating with a target price of $325. Reasons include higher revenue, larger contract reserves, improved profit margins and an improved fiscal year 2027 outlook. Although the company rolled forward forecasts, it lowered the profit multiple in the model from 24.5 times to 23.5 times to reflect the downward trend in software valuations.
• Wells Fargo: maintains an "overallocation" rating with a price target of $280. The bank believes Oracle can bring new signings and growth opportunities without increasing cash outflows. Management remains confident in the fiscal year target, but has not significantly increased guidance. Wells Fargo listed the next catalyst as "A-Day" event.
• Barclays: maintains an "overallocation" rating with a price target of $252. The bank noted that the annual growth rate increased from 21% to 30% compared with the first quarter. At the same time, with the completion of a $20 billion equity financing, Oracle's funding situation improved, and management also responded to questions about delays and profit margins.
• UBS: maintains a "buy" rating with a target price of US$250. The bank said the after-hours share price rise was driven by better-than-expected revenue and profits, faster cloud infrastructure growth and successful equity sales. The downside is that Oracle's fiscal 2027 revenue forecast remains unchanged. However, UBS notes that AI-driven growth has risen to 30 per cent from 11 per cent a year ago.
• Bank of America: Maintain a "Buy" rating with a target price of $240. The rating is based on the accelerated adoption of Oracle cloud infrastructure. However, despite significant revenue growth in OCI, the bank also pointed to limited visibility of Oracle's return on investment and profitability.
• JPMorgan: maintains its "overallocation" rating and sets its December 2027 target price of $200 (replacing the previous December 2026 target of $210). The bank expects higher revenue from new capacity to drive profit growth with similar profit margins. At the same time, JPMorgan believes that Oracle's discount to peer valuations is expected to narrow.