On Monday, Barclays maintained its Overweight rating on Oracle Corporation (NYSE:ORCL) shares, with a price target set at $147.00. The focus for investors is anticipated to be on Oracle's revenue growth guidance for fiscal year 2025 during the upcoming fourth-quarter earnings report.
The current market consensus estimates a slight growth acceleration to approximately 8.6% year-over-year, up from around 6.6% in fiscal year 2024, which is pivotal for achieving the projected revenue target of $65 billion in fiscal year 2026.
Barclays commented on the potential outcomes for Oracle's share price, suggesting that the guidance for fiscal year 2025 will likely have a more significant impact than the fourth-quarter results themselves. The firm's stance on Oracle reflects a positive outlook on the company's position within the large-cap software sector.
The expectation is that Oracle will continue to reap benefits from the broader adoption of artificial intelligence (AI), given its status as one of the few providers equipped with a modern compute platform poised to take advantage of increasing capacity.
According to Barclays, only a fraction of this potential is expected to be evident in the fourth-quarter results.
In other recent news, Oracle Corporation has been in the spotlight with various developments. Evercore ISI has maintained an Outperform rating on the company, citing the anticipation of a solid fourth quarter and a fiscal year 2025 guidance that aligns with current estimates.
Oracle's strategic position within the public cloud market and emerging opportunities in artificial intelligence (AI), particularly with Oracle's xAI initiatives, were highlighted as potential drivers for further gains.
Recent developments also include Elon Musk's xAI planning to construct a supercomputer potentially in collaboration with Oracle by fall 2025. Oracle has also rolled out new AI tools for its Oracle Fusion Cloud Customer Experience, aiming at improving customer satisfaction and accelerating deal cycles. Additionally, Oracle announced the availability of NVIDIA (NASDAQ:NVDA) AI Enterprise on Oracle Cloud Infrastructure Supercluster for U.S. government agencies, aiming to accelerate sovereign artificial intelligence.
UBS maintained a buy rating for Oracle shares, focusing on the potential effects of a TikTok ban or divestiture on Oracle's role as the main cloud infrastructure provider for TikTok in the United States. Lastly, Oracle's cloud regions have been accredited by the U.S. Department of Defense at Defense Information Systems Agency Impact Level 6, enabling the hosting of Secret classified workloads.
InvestingPro Insights
Oracle Corporation's (NYSE:ORCL) commitment to shareholder returns is evidenced by its track record of raising dividends for 10 consecutive years, a trend that aligns with the positive outlook Barclays has on the company. As Oracle gears up to release its fourth-quarter earnings report, investors are keeping an eye on the company's revenue growth guidance for fiscal year 2025. With a current market capitalization of $342.11 billion and a P/E ratio standing at 32.45, Oracle's valuation reflects its prominent status within the software industry.
An InvestingPro Tip notes that Oracle is trading at a high P/E ratio relative to near-term earnings growth, which may be a point of consideration for investors looking at the company's value proposition. Additionally, Oracle's revenue growth over the last twelve months as of Q1 2023 was 9.49%, indicating a healthy upward trajectory that could instill further confidence in the company's ability to reach its ambitious $65 billion revenue target by fiscal year 2026.
For investors seeking a deeper dive into Oracle's financials and strategic positioning, there are additional InvestingPro Tips available. These insights, coupled with the exclusive PRONEWS24 coupon code, can offer an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing valuable context as Oracle continues to capitalize on the growing AI market and broader tech trends.
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