Oracle stock jumps 5% as analysts point to cloud upside

Oracle shares climbed 5% on Thursday, extending a 3% gain from the prior session, as investors weighed a mixed set of analyst views ahead of the company’s fiscal first-quarter results due Sept. 8. Traders cited cloud growth prospects and questions about funding for large capital plans and AI expansion.

Bernstein analyst Mark Moerdler described Oracle as “a complex and volatile business,” and wrote that investor concerns center on profitability and the cash needed to fund long-term, noncancelable contract commitments. Moerdler wrote he believes Oracle may be nearing the end of needing additional cash and is entering an investment phase that could lift revenue and profits. He set a $325 price target, compared with the stock’s roughly $145.30 level.

Moerdler highlighted Oracle Cloud Infrastructure, or OCI, as a key growth engine. Oracle reported 93% constant-currency growth for OCI in its most recent fiscal fourth quarter. Moerdler expects OCI growth to accelerate in fiscal 2027 and to grow faster year over year than the company’s overall revenue.

Analysts from other firms adjusted price targets while keeping positive ratings. Jefferies trimmed its target to $290 from $320 and retained a Buy rating, noting that sentiment toward Oracle had been near peak-negative. TD Cowen lowered its target to $240 from $300 and kept a Buy rating, identifying Oracle’s Oct. 28 analyst day as the next major event for updates on the cloud business and potential long-term targets.

Analyst price targets now range roughly from $240 to $325, reflecting differing views on how to weigh cloud growth against Oracle’s planned spending and financing needs.

Oracle has outlined heavy capital plans for fiscal 2027, which runs June 1 through May 31. The company plans $95 billion in capital expenditures for the year. It raised about $43 billion in debt financing in fiscal 2026 and expects to raise roughly $40 billion in fiscal 2027 through a mix of debt and equity.

Investors are following the company’s remaining performance obligations, commonly referred to as backlog, which stand at $638 billion. Market participants are watching how quickly those commitments can convert into reported revenue and recurring sales.

Oracle’s revenue mix is shifting. Lower-growth legacy license sales have been declining, while higher-growth software-as-a-service products such as Fusion, NetSuite and OCI are taking a larger share of software revenue. Analysts say the composition change is central to forecasts for future profitability and cash flow.

The upcoming fiscal first-quarter report on Sept. 8 is expected to provide more detail on the pace of cloud growth, the scale of AI-related investment, and plans for funding the company’s expansion. Investors will review the results for signals about revenue trends, capital spending and the timing of backlog conversion.