Oracle (NYSE:ORCL) shares jumped after the company reported first-quarter results, driven by stronger-than-expected growth in its cloud and AI infrastructure business and a record backlog of multi-billion-dollar contracts, highlighting its expanding role in the rapidly growing AI market.
Benzinga contacted Ivan Feinseth, CIO and Director of Research at Tigress Financial Partners, about the correlation of Oracle and Amazon.com (NASDAQ:AMZN).
Feinseth attributed Oracle’s surge to a surprise gain in its cloud platform, noting that while the jump has prompted concerns about competitive losses for rivals, “Oracle is winning on its own strength,” adding that most users rely on multiple cloud platforms.
Also Read: Oracle Gains Wall Street Attention As Microsoft, Meta Fuel AI Infrastructure Boom
The optimism was echoed by analysts. Piper Sandler’s Brent Bracelin maintained an Overweight rating and raised the price forecast from $270 to $330, highlighting Oracle’s transformation from a technology stalwart to a secular AI infrastructure leader.
Bracelin noted Recovery Point Objective (RPO) climbed to $455 billion in fiscal first-quarter 2026, a 359% year-over-year increase, while backlog rose $317 billion in a single quarter.
Four multi-billion-dollar contracts with three customers drove the record gain, with cloud RPO alone surging nearly 500% year-over-year.
Bracelin added that Oracle’s capital expenditure guidance jumped to $35 billion from over $25 billion, reflecting demand that continues to “dramatically outstrip” supply.
He projected that Oracle’s ability to secure multi-billion-dollar AI contracts and sustain more than 40% growth across IaaS and SaaS segments could lift the cloud mix to over 50% of revenue next year. Fiscal 2026 adjusted EPS is projected at $6.75, rising to $8.04 in fiscal 2027.
Citizens JMP analyst Patrick Walravens echoed the bullish outlook, reiterating a Market Outperform rating and raising the price forecast to $342 from $315.
He described Oracle’s results as “spectacular,” with RPO up 359% year-over-year versus 41% last quarter. Oracle’s stock jumped 28% in after-hours trading and is up roughly 45% year-to-date, outperforming the S&P 500 and Russell 3000.
Walravens slightly lowered fiscal 2026 EPS to $7.00 from $7.13 and trimmed fiscal 2027 EPS to $8.68 from $8.75, but sharply raised fiscal 2028 EPS to $14.32 from $10.92, reflecting projected 53% revenue growth.
He cited OpenAI’s $30 billion annual deal, alongside wins with xAI, Meta Platforms (NASDAQ:META), Nvidia (NASDAQ:NVDA), and Advanced Micro Devices (NASDAQ:AMD), positioning Oracle as the “go-to place” for AI workloads.
Walravens highlighted Oracle’s capture of both training and inference markets, its AI-driven application reinvention, and a capital-light approach to data center expansion.
Bank of America Securities analyst Brad Sills upgraded Oracle from Neutral to Buy and raised the price forecast from $295 to $368. He highlighted exceptional first-quarter RPO and backlog growth of 230% quarter-over-quarter, projecting OCI revenue to grow at a 51% four-year CAGR.
Sills emphasized Oracle’s growing role in the AI infrastructure market, estimated to reach $155 billion by 2030, and noted the company’s combined software and hardware strengths attracting top-tier customers including OpenAI, xAI, Meta, Nvidia, and AMD.
While acknowledging uncertainty over ROI from rising capex, fiscal 2026 guidance increased to $35 billion from over $25 billion, he projected AI-related investment could deliver a low-50% topline return in fiscal 2027. Sills’ adjusted EPS projections are $6.85 for fiscal 2026, $8.06 for fiscal 2027, and $9.93 for fiscal 2028.
ORCL Price Action: Oracle stock is trading higher by 34.72% to $325.36 at last check Wednesday.
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