On Tuesday, Piper Sandler shared a positive outlook for Oracle Corporation (NYSE:NYSE:ORCL) and raised its price target on the stock to $210 from the previous $185 while maintaining an Overweight rating.
This adjustment comes as a response to Oracle's fourth consecutive quarter of accelerating cloud revenue performance obligations (cRPO) growth, which reached 20% year-over-year compared to 18% in the last quarter.
The firm's confidence in Oracle is bolstered by what it sees as a potential shift from a multi-quarter to a multi-year growth acceleration, driven by the underlying trends in cloud services and artificial intelligence (AI). Oracle's AI infrastructure has attracted new customers, including Meta (NASDAQ:META), which now joins other tech companies such as xAI, NVIDIA (NASDAQ:NVDA), and Cohere in utilizing Oracle's offerings.
"While the Oracle Cloud momentum was encouraging, consistent expense discipline coupled with improving margins across cloud applications and infrastructure was equally encouraging," the analysts said.
The firm's outlook reflects an expectation that Oracle's cloud momentum will continue, prompting the price target revision and the reaffirmation of the Overweight rating.
The updated price target is based on the continued positive performance in Oracle's cloud business and is projected by rolling forward to calendar year 2029 estimates.
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