‘It’s Just the Beginning’: Bank of America Says Oracle Stock (ORCL) Could Hit $300

Oracle (NYSE:ORCL) stock appears to be reversing a months-long downturn, with shares up 8% in Wednesday’s session after the company’s fiscal third-quarter results and outlook beat expectations.

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The software giant reported revenue of $17.19 billion, up 21.7% year over year and $280 million above analysts’ forecasts. Cloud revenue, which includes both infrastructure and applications, reached $8.9 billion, rising 44% y/y (41% in constant currency) and exceeding the $8.84 billion consensus estimate. RPO (Remaining Performance Obligations) totaled $553 billion, marking a hefty 325% y/y increase. On the bottom line, adjusted EPS came in at $1.79, $0.10 above expectations.

Looking ahead to FQ4, Oracle anticipates revenue growth of 19% to 21% (18% to 20% in constant currency), which translates to $18.93 billion to $19.24 billion. Adj. earnings are expected between $1.92 and $1.96 per share, slightly above the $1.93 consensus estimate.

At the same time, management raised the full-year 2027 revenue target to $90 billion, up from $85 billion, supported by strong momentum in cloud services and AI infrastructure.

Scanning the results, Bank of America analyst Brad Sills rues the fact there were hardly any updates on the large $300 billion cloud computing OpenAI contract signed last September.

“Uncertainty remains as to the timing of delivery and serviceability of this key contract,” the analyst commented on the matter.

Additionally, while 41% y/y cc cloud revenue growth represented a “healthy acceleration” from 33% in Q2, it came in below Sills’ expectation of 44%, with the likely cause being weakness in the SaaS segment.

However, there are mostly positives to note, and as was evident in investors’ reaction, Sills thinks the results should “help counter bearish sentiment taking hold on the stock recently.”

The $30 billion increase in RPO, together with the higher fiscal 2027 revenue outlook, implies strong demand for both AI infrastructure and traditional cloud services. Notably, says the analyst, the improved outlook was not tied to a single large AI enterprise deal but instead reflects multiple contracts.

“This suggests Oracle is benefitting from ramping AI adoption in the broader enterprise segment,” Sills added. “Also, it is encouraging that Oracle was able to raise the FY27 revenue outlook without taking capital expenditures higher. This is due to a higher mix of asset light ‘bring your own hardware’ deals and deals involving more up front payment, to ease capital intensity.”

To this end, Sills assigns ORCL shares a Buy rating, along with a $300 price objective, a figure that points to one-year returns of 85%. (To watch Sills’ track record, click here)

The bullish view is widely shared on Wall Street. Among the 32 recent analyst reviews, 28 recommend buying the stock while 4 remain on the sidelines. That lopsided distribution results in a Strong Buy consensus rating, and the $256.23 average price target suggests the shares could deliver returns of ~58% over the coming year. (See ORCL stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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